Danan oil field in Ilam Province is located along Iran"s border with Iraq. It lies 80 kilometers northwest of Andimeshk and 30 kilometers southeast of Dehloran. The field incorporates Bangestan and Asmari reservoirs.

In this field, Ilam and Sarvak formations - measuring 85 and 750 meters thick, respectively - form Bangestan Reservoir whose thickness is 835 meters.

At present, 26,000 b/d of crude oil is being extracted from Danan field before being carried to the Dehloran production center through pipeline. After being sweetened, it is pumped through a 52-kilometer pipeline to the Cheshmeh-Khosh desalination unit.

Danan is administered by Iranian Central Oil Fields Company (ICOFC). A variety of scenarios have so far been envisaged at National Iranian Oil Company (NIOC) for the development of the Danan field. The broad lines for the development of the Danan field (scenarios categorized under natural depletion, water injection and gas injection) have been submitted and experts have offered their views.

In studying the Danan field, once the reservoir"s properties are examined, a static and dynamic model is designed and the performance of the reservoir is studied under different scenarios. Natural depletion scenario includes drilling new wells, including vertical and directional wells, and gas injection scenario involves returning gas to an injection well in the reservoir.

These studies have indicated that in the gas injection scenario, oil production wells face the problem of high GOR, while in water injection scenario, due to the low permeability of reservoir rock the volume of injected water is limited; therefore the recovery rate could not be improved.

Thus, the best scenario for the development of the Danan field is natural depletion which involves drilling new wells with high diversion and spudding directional wells in order to establish further contract with the rock reservoir. Application of this method will require a fewer number of wells than vertical drilling.

The contract for exploration and development of Danan block was signed between NIOC and a Vietnamese company in March 2008 for exploration and development activities, identification and evaluation of hydrocarbon deposits in this block and winning cooperation of top international companies in the upstream sector after issuing tender bids. The Vietnamese party has so far invested more than $20 million in this block.

Meanwhile, MAPNA Group and Iranian Central Oil Fields Company have signed a contract for improved oil recovery (IOR) in the Danan field.

MAPNA Group"s assignments will include drilling of eleven vertical wells, design and execution of acid fracturing operation, and geophysical services (3D seismic survey, data processing, and interpretation) in an area of 230 square kilometers, as well as skid mounted desalination with a capacity of 10 thousand b/d, and construction of a 55-km pipeline.

New Technology Needed in Cheshmeh-Khosh

Cheshmeh-Khosh which was explored in 1964 and started production 11 years later is one of old fields in western Iran. Its current output stands at 18,000 b/d and its gas production stands at 3.3 mcm/d.

Cheshmeh-Khosh which is 52 kilometers south of Dehloran and 70 kilometers west of Andimeshk is located in Ilam Province in western Iran.

The oil produced from this field is processed before being carried to Ahvaz-3 production plant through a 153-kilometer pipeline. This oil is finally brought to Kharg Island to be exported through the Kharg oil terminal or to feed refineries.

Cheshmeh-Khosh is run by ICOFC and it currently needs investment and state-of-the-art technology in order to preserve and enhance its output.

It has two reservoirs in the Asmari and Bangestan formations. The Amsari formation is made of sandstone with favorable reservoir properties, while the Bangestan formation is over 700 meters thick.

Currently, oil is extracted from the Asmari reservoir while the Bangestan formation is to produce 20,000 b/d. The recovery rate of Asmari would be 27% to 35%, while the Bangestan reservoir would have a 6-8% recovery rate.

The Cheshmeh-Khosh field"s crude oil production capacity stands at 18,000 b/d on average, while 115 mcf/d of natural gas could be extracted from this field.

The desalination unit of Cheshmeh-Khosh is operating at a nominal capacity of 181,000 b/d now.

ICOFC officials have said that new production technologies would be used in the Cheshmeh-Khosh field.

Currently, oil recovery is merely made from the Asmari reservoir. Plans are under way for up to 20,000 b/d recovery from the Bangestan formation. Branched and horizontal drilling, as well as hydraulic fracturing has been proposed for recovery from the Asmari field.

The enhanced oil recovery (EOR) methods proposed for both reservoirs include water and gas injection.