Iran forms body to oversee South Pars deal

Iran

TEHRAN, July 13, 2017 – A new government commission will oversee the deal signed last week between Iranian officials and super-major Total, parliament speaker Ali Larijani said on Wednesday.

Local media reported that the commission will include the heads of Iran’s parliamentary energy commission and planning and budget commission, as well as representatives of the country’s judiciary.

Iran signed a contract with a Total-led consortium for the development of phase 11 of the super-giant South Pars gasfield on July 3, a deal that marked the first major investment in the country’s oil and gas industry from a Western IOC since sanctions were lifted in early 2016.

Total has pledged to invest an initial USD 1 billion in the project, which the company estimated in March would require USD 4 billion.

A company spokesman told Reuters on July 2 that the agreement will last 20 years, with gas production beginning in 2021. Once completed, phase 11 will produce 51 mcm (1.8 bcf) per day.

South Pars is part of the world’s largest gasfield, which straddles the Iran-Qatar maritime boundary. The field is estimated to hold 51 tcm (1,800 tcf) in gas reserves and its development has been planned in 24 geographical areas known as phases.

Phase 11 covers an area of 98 square kilometres. Its development was first planned in 2006 with involvement from Total, but the super-major exited the project in 2008 and CNPC resumed works then halted them in 2010. Development was delayed during sanctions.

The phase is planned for development in two segments. The first, estimated to cost USD 2 billion, involves construction of 30 wells and two wellhead platforms connected with two pipelines to an onshore facility, as well as two 105-kilometre 32-inch pipelines that will transfer gas onshore.

Iranian Minister of Petroleum Bijan Namdar Zangeneh also said on Wednesday that each year of delay in developing the South Pars field could cost the country USD 5 billion.

Iran is preparing 14 tenders for exploration of the country’s oil and gasfields, an official said at the World Petroleum Congress on Monday.

Amir Hossein Zamaninia, deputy minister for international affairs, said on Tuesday that the South Pars contract promised to be the first of many such deals, with more news expected in the coming weeks.

Read our latest insights on: