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Iran to tender North and South Azadegan together

25 May 2017 14:25 (+01:00 GMT)
Iran to tender North and South Azadegan together

Vienna, 25 May (Argus) — Iran is planning to combine the North and South Azadegan fields and tender them as one project, oil minister Bijan Namdar Zanganeh said today.

State-owned NIOC was originally planning to launch separate tenders for the two projects, with the tender for South Azadegan scheduled to be the first of the post-sanctions era.

But a recent rethink by both the oil ministry and NIOC has reversed this decision, with Iran's first post-sanctions tender now set to cover the development of both the north and south sides of the giant field together.

"Azadegan is one. There will be one tender for all of Azadegan," Zanganeh said today.

After announcing in January a list of 29 foreign companies that were pre-qualified to participate in Iran's post-sanctions tenders, NIOC originally aimed to launch this first tender in February.

But renewed internal opposition to some of the terms of Iran's new upstream contract model, the Iran Petroleum Contract (IPC), delayed these efforts, forcing NIOC to postpone the launch of this tender until after Iran's 19 May presidential election.

Zanganeh today said that preparations for this tender are "going ahead."

"We are finalising the tender documents, and very soon we will provide the final tender documents to the main international companies that have been chosen by NIOC," he said.

Zanganeh did not specify which companies had been chosen to participate in this tender. But five companies have so far signed preliminary agreements with NIOC to evaluate and study the South Azadegan field with a view to developing it in the future: Total, Shell, Japan's Inpex, Malaysia's state-owned Petronas, and domestic Iranian company Tenco.

China's state-owned CNPC, which was awarded contracts to develop both North and South Azadegan in 2009 and 2011, respectively, has also been invited to participate in the tender "as one of the partners," Zanganeh said.

This suggests that NIOC may be looking to replicate the provisional deal struck with Total, CNPC and NIOC subsidiary Petropars to develop phase 11 of the supergiant offshore South Pars gas field in the Mideast Gulf.

Crude oil production from South Azadegan is now at around 80,000 b/d, and scheduled to rise to 160,000 b/d, NIOC's upstream development arm Pedec said in May. Output from North Azadegan is holding at around 75,000 b/d.