MEOG: Iran talks up oil investment

In this week’s MEOG we look at Iran’s continued optimism about its spending plans to build out the country’s oil sector and a field development contract award in the UAE. 

The Iranian government this week said it would invest $4bn in oil and gas projects in the southern Khuzestan Province as the sums promised for investment continue to spiral.   

Speaking during an event in Khuzestan this week, Iran’s Vice President for Executive Affairs Solat Mortazavi said that the latest round of funding would be provided by the headquarters for Execution of Imam Khomeini’s Order (EIKO), the Mostazafan Foundation, the government and Iranian banks.  

Khuzestan is home to the West Karoun oilfield cluster which includes several large oilfields that straddle the Iran-Iraq border, namely Azadegan, Yaran, Yadavaran and Darkhoein, with the first three divided into north and south projects. The block holds an estimated 67bn barrels of oil in place.    

Oil Minister Javad Owji and officials from the National Iranian Oil Co. (NIOC) have spoken enthusiastically about the country’s plans to increase crude oil production capacity from the current level of around 3.8mn barrels per day to 5.7mn bpd by the end of the decade.    

In January, NIOC’s director of corporate planning, Karim Zobeidi, said: “By attracting the necessary investment, we intend to increase Iran’s oil production capacity to 5.7mn barrels in the next eight years.” 

Meanwhile, the onshore-focused arm of state-owned Abu Dhabi National Oil Co. (ADNOC) this week announced the award of a contract to carry out enhanced oil recovery (EOR) work at the Emirates’ key Bab oilfield.   

ADNOC said via social media that a $227mn contract had been awarded by ADNOC Onshore to local contractor Robt Stone Middle East to increase oil production from the field, which has a capacity of around 450,000 barrels per day (bpd) of light, sour Murban crude, which has an API gravity of 40.5°. On March 5 ADNOC increased its official selling prices (OSP) for the month by nearly $9 per barrel as buyers look for alternatives to Russian crudes.  

Alluding to “first-of-its-kind technology” designed by ADNOC, the announcement said: “the technology will use advanced polymers and [carbon dioxide (CO2)] captured from [ADNOC’s] carbon capture, utilisation and storage (CCUS) facility, Al Reyadah”.  

It said this would boost Bab’s recoverable reserves “up to 70% while unlocking additional barrels of Murban crude”.