• May 27 2023 - 15:01
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ICOFC Invests $4bn in Field Development

Iran’s enhanced gas production has prompted National Iranian Oil Company (NIOC) to consider crash plans for recovery from independent gas fields.


Iran’s enhanced gas production has prompted National Iranian Oil Company (NIOC) to consider crash plans for recovery from independent gas fields. To that end, a comprehensive plan has been formulated for early gas recovery from the gas fields run and operated by Iranian Central Oil Fields Company (ICOFC), which is the second largest gas producer in Iran. Mehdi Heydari, CEO of ICOFC, tells “Iran Petroleum” the company is expected to add 10 mcm/d to its output by March 2024.

The following is the full text of the interview Heydari gave to “Iran Petroleum”:


How many fields is ICOFC currently developing?

Production, development and storage constitute the three special missions assigned to ICOFC. Being active in more than 14 provinces, ICOFC is the second largest gas producer in the country, thereby playing an instrumental role in energy supply security and winter gas supply. The three companies of West Oil and Gas Production Company (WOGPC), East Oil and Gas Production Company (EOGPC) and South Zagros Oil and Gas Production Company (SZOGPC) along with the strategic Sarajeh zone cover ICOFC operations. The outstanding feature of ICOFC is gas production. WOGPC, EOGPC and SZOGPC run totally 85 oil and gas fields, whose development is under way particularly for gas production. ICOFC has also formulated special projects to make up for gas imbalance in the country. For this purpose, ICOFC has embarked on developing gas fields including in northeastern Iran by EOGPC.   


How much is the current gas production capacity at ICOFC-run fields?

Under normal conditions, according to NIOC plan, 242 mcm/d of gas is produced by ICOFC-run fields. But by the end of the current calendar year, 10 mcm/d has to be added to ICOFC’s output, which would be instrumental in ending the winter gas imbalance in the country. ICOFC is committed to adding 10 mcm/d to its output this year and we will try to fulfil this obligation.  


Some fields run by EOGPC and SEOGPC are not yet producing any gas. Are you planning to extract gas from these fields or is the NIOC Directorate of Exploration planning to assign new fields to you?

We plan development in two phases. First, untapped fields need to be developed. These fields are under authority of SZOGPC, EOGPC and WOGPC. But the Directorate of Exploration has been asked to carry out exploration in some strategic areas which may need gas. For instance, the Directorate of Exploration should discover small fields in northeastern Iran to help gas supply to that area which needs gas support in winter due to pressure fall-off.


Which fields, owned by SZOGPC, EOGPC and WOGPC, are currently active?

At EOGPC, Khangiran, Gonbadli, Mozdouran and Shourijeh are already producing gas. The Tous field is also expected to join them in the current calendar year. The major field in this area is Khangiran with 44 mcm/d output in winter peak. With gas storage during eight months of year, nearly 66 mcm/d of gas is supplied by EOGPC during winter. Tous is expected to bring the figure to 70 mcm/d.

At SZOGPC, which is the most important subsidiary of ICOFC, four strategic zones – Parsian, Nar & Kangan, Aghar & Dalan and Sarkhoun $ South Gashou – are producing gas. Each zone, particularly Parsian, Aghar & Dalan, and Nar & Kangan, are supplying gas to northeastern Iran. The largest field is Parsian with a 66 mcm/d output.


How much gas is produced by these four fields?

During winter peak, they produced 162 mcm/d.


What about WOGPC and the Tang-e Bijar field?

WOGPC’s gas production is done at Tang-e Bijar whose second phase development, assigned by gas compressors, would bring gas production capacity in western Iran to 11 mcm/d. We’re in the process of signing agreement for the second phase development of this field. It will take 24 months to launch this gas compressor station, but we will reach conclusion as soon as an agreement has been signed. Of course, the Ilam gas refinery would also receive more gas.


How many fields are under development by ICOFC in total?

In light of development of key fields by ICOFC, the company’s policy has changed from production-based approach to production-development-based approach. These fields are expected to be developed within the framework of 15 packages. Operation of two gas compressor stations (Shanol and Sarkhoun), the second phase of the Farashband refinery and 12 fields form this package. Development operations will be carried out during five years under EPCF deals to bring gas output 130 mcm/d by 2026. It means that a volume the equivalent of four South Pars phases would be added to ICOFC’s gas output.


What are these fields?

Tous in northeast, Baba Qir and Bistoun in west, Dey, Aghar, Sepid Zakhour, Sepid Baghoun, Halegan, Eram, Pazanan, Khartang and Gordan under SEOGPC. These fields are expected to undergo development under EPCF deals with $4 billion investment. The package will be assigned entirely to contractor who would determine the financier. Based on the model presented for this project, investment will return in four to five months.


Has any contractor been chosen?

We are in talks with the contractor and our talks are nearing conclusion.


Are they Iranian?

Yes, they are. Of course, we will engage Russian and Chinese companies, with which we have signed MOUs and we are in talks on the price of agreement.


Haven’t you yet reached agreement with Russian and Chinese companies?

Iranian companies have joined Chinese and Russian companies and we are in talks to reach agreement with them. For instance, development of the Farashband refinery and the Eram and Pazanan fields is close to agreement. Foreign partners will be hired. For Khartang, Gordan and Pazanan, MOUs have been signed, which will soon become agreement.


Which fields are expected to start early production?

NIOC planned early gas production from the Aghar, Dey and Tous fields in a bid to make up for gas imbalance. Production from these three fields is projected to add 10 mcm/d to ICOFC’s output this calendar year. Moreover, early production from the Khartang field – after drilling seven new wells and working over one well – would add another 10 mcm/d next calendar year. Therefore, ICOFC would see its output rise 20 mcm/d by next calendar year. The drilling contractor for Khartang, Aghar, Dey and Tous fields is National Iranian Drilling Company (NIDC). Early production is also planned in the Madar field, which lies in the Gulf of Nayband, which would add nearly 20 mcm/d of gas to national output. Madar’s reservoirs are similar to that of South Pars. It can also produce more than 45 kb/d of condensate. An MOU has been signed for this field, which is close to agreement.


Given the age of ICOFC gas fields, particularly SOGPC fields, would you please explain about the launch of gas compressor stations there?

At SEOGPC, Varavi and Homa are ageing fields that need compressor stations. We have signed an agreement with a local company and proper measures have been undertaken. In coming winter, the Varavi and Homa gas compressor station will become online, which would help sustain production from these two fields. In addition to two compressor stations, a separation center will be also established to upgrade the quality of feedstock fed into the Parsian gas refinery. This center is also planned to come online by the end of the current calendar year.


How about Nar and Kangan?

Both are ageing fields currently in the last third of their lifecycle. Launching gas compressor stations for these two fields has been assigned to Oil Turbocompressor Company (OTC). At the Nar field whose contractor started work last December, only turbocompressor rearrangement is planned to be done. But for the Kangan field, a compressor station is needed, which the contractor should prepare after signing an agreement. An agreement is to be signed soon.



How many compressor stations will be launched by WOGPC?

With the operation of Dehloran, Cheshmeh-Khosh and West Paydar gas compressor stations, 250 mcf/d of gas would be fed into NGL 3100 in western Iran. NGL 3100 is expected to become operational by the end of the current calendar year for the purpose of flare gas gathering at Azar, Cheshmeh-Khosh, Dehloran, West Paydar and Danan fields.


ICOFC has for the first time set up mini-NGL facilities in the country. Would you please explain about that?

Yes, the Cheshmeh-Khosh mini-LNG facility was launched last calendar year to prevent gas flaring. Its capacity is up to 20 mcf/d, which would help the environment and production stability because ICOFC is sensitive to its environment alongside sustainable production. All flare gas packages at ICOFC, except for Serkan and Maleh Kuh fields, have been finalized and awarded to contractor.


How much associated gas is being gathered totally?

Flaring comes from five fields owned by ICFOC. At the Cheshmeh-Khosh field, a mini-LNG is gathering 17 mcf/d of flare gas. Flare gas gathering at Khesht, Sarvestan and Saadatabad has been awarded to contractor and is currently under way. For Serkan and Maleh Kuh fields, auction is under way. 


What has been done for underground gas storage?

Underground gas storage is a strategic activity pertaining to gas supply. It is steered by ICFOC in the upstream sector. Currently, Sarajeh and Shourijeh fields store gas during eight months of year to be consumed during the last four months of year. Maximum production from these two fields in winter is about 26 mcm/d. The second phase of gas storage at Shourijeh is under way by National Iranian Gas Company (NIGC).


How much will be added to ICOFC’s total oil output by 20 March 2024?

Development of Naftshahr, Sarvestan and Saadatabad fields has been awarded under EPC and EPD contracts. Development of Naftshahr and Saadatabad has been concluded while development of the Danan field is in the final stage. Once these fields reach maximum production they would be producing along with Khesht more than 80 tb/d. The Azar field has been also assigned to ICOFC. It is jointly owned by Iran and Iraq. It has been developed by Petroleum Engineering and Development Company (PEDEC), which is being assigned to ICOFC for production steering. In its initial Master Development Plan (MPD), it is estimated to produce 65 tb/d of oil.


Where does the second development phase of the Dehloran field stand now?

It is in the process of licensing round. It would add 10 tb/d to ICOFC’s output.


How much investment is ICOFC earmarking for development of fields?

In light of ICOFC’s development policy, nearly $4 billion has been invested in development of Tous, Aghar, Dey, Eram, Pazanan, Khartang, Gordan, Madar, Shanol, Sarkhoun, Baba Qir, and Bistoun gas fields as well as the second phase of the Farashband refinery. Since development of these fields is EPCF-based, ICOFC is fully ready to attract domestic and foreign investment and good measures have been undertaken in this regard. An event is planned to be held to offer ICOFC opportunities for investment to explain all projects to would-be domestic and foreign investors. Therefore, we invite all local and foreign companies to invest in these projects because NIOC guarantees the return of investment, which would be recouped in the form of revenue from the fields or oil and condensate from other fields.


What has been done with regard to supporting knowledge-based companies?

As far as first-time manufacturing and supporting knowledge-based companies is concerned, good measures are under way at ICOFC. 10-inch smart pigging has been done for the first time in the country, which has yielded good results. Furthermore, an agreement has been signed with another knowledge-based company to produce temporary plugs to prevent cement pouring inside reservoirs and stop water production. These plugs would dispense with the need for cement pouring and contaminating oil and gas reservoirs. With regard to commodity manufacturing, significant measures have been undertaken at ICOFC’s three subsidiaries, mainly commodities for wellhead and downhole pumps by Iranian companies. We are using these commodities. It has to be recalled that for the first time in the history of Iran’s petroleum industry, a 10-inch smart pig was developed while a handful of nations had monopolized its manufacturing technology. Smart pig is among 10 strategic items of Iran’s Petroleum Ministry. Sponsored by ICOFC, this pig was built by a local knowledge-based company before undergoing field test for satisfactory results. That would help monitor corrosion of pipelines in all oil and gas fields, particularly gas fields for sustainable gas supply in winter. Given the existence of thousands of kilometers of main and pipelines for oil and gas across the country, this magnetic smart pig would periodically detect defects in oil and gas pipes to be repaired for safe production.


 Iran Petroleum


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