Iranian Contractor Replaces Gazprom to Develop Azar Oil Field

The National Iranian Oil Company signed a deal with an Iranian contractor to develop Azar oil field after it dropped Gazprom Neft, the oil arm of the Russian Gazprom company, out of the deal.

The giant Azar oil field is located in Iran’s western region of Mehran along the border with Iraq.

Based on the contract signed on Tuesday, the field will be developed jointly by OIEC company and the Civil Servants Pension Fund in a period of 55 months.

Initial production will start by the next 36 months with 30,000 barrels per day and the production capacity will eventually reach 65,000 barrels a day after 55 months.

Earlier this week, senior Iranian oil ministry officials announced that they had fired the Russian gas company, Gazprom, from Azar oil field in Western Iran.

“We eventually came to the conclusion to cut our cooperation with this company in Azar oil field and strike a deal with a domestic contractor,” Managing Director of the National Iranian Oil Company (NIOC) Ahmad Qalebani told FNA on Sunday.

“Unfortunately, the Russian Gazprom company delayed fulfilling its undertakings and the NIOC had given it repeated warnings, which were never heeded (by the other side),” he continued.

The NIOC chief further pointed out that a “consortium of Iranian contractors will pick up work in the field”, adding that the Iranian contracting company would soon be named to the media.

In November 2009, Gazprom Neft, the oil arm of Gazprom, and the National Iranian Oil Company signed a memorandum of understanding to collaborate in the development of oil fields and to study the development of two other Iranian oilfields, Azar and Changule.

After repeated warnings, Iran gave a last opportunity to Gazprom to fulfill its undertakings in mid September.

Russian Energy Minister Sergei Shmatko, who was in Iran in mid September to attend a ceremony to mark the official launch of Iran’s Bushehr nuclear power plant, told reporters that the two sides “have concluded an agreement to decide in a month time if Gazprom will take part in the development and exploitation of Azar oil field.”

In September, Iranian Oil Minister Rostam Qassemi announced that his ministry plans to concentrate more on developing the several oil fields shared with the neighboring countries.

“This year serious development will start in joint fields that count to 27 and we hope the move will yield positive results,” Qassemi said, addressing a meeting in Iran’s Chamber of Commerce at the time.

In August, a senior Iranian oil official announced that the country has worked out an agreement with its neighbor, Iraq, to develop joint oil fields at the two countries’ shared borders.

Speaking to FNA, Managing-Director of the Iranian Central Oil Fields Company (ICOFC) Mehdi Fakour said, “We are waiting for the Iraqis to be prepared for inking the deal.”

Earlier this year, Tehran and Baghdad agreed to set up joint expert committees to finalize technical and financial details of a deal over developing joint oil fields.

The two countries have 23 joint oil fields in their border regions.