Seifollah Jashnsaz, NISOC head made the statement in a meeting between the company’s board of directors and Minister of Petroleum Seyed Kazem Vaziri-Hamaneh and his deputies in Ahvaz, the capital of southern Khuzestan Province.

NISOC had been authorized since one month ago to develop Azadegan oilfield and to start its production earlier than schedule.

He reiterated that the studies would be conducted and the six exploration wells would be put into operations in six months and the field would produce 20 thousand barrels of crude oil daily.

Vaziri-Hamaneh urged the organization of a meeting between the board of directors, the executive experts of the development plan, and Petroiran Development Company (PEDCO) managers with the aim of studying the master development plan (MDP) of Azadegan field.

An early production from Azadegan oilfield was awarded to NISOC early April.

The National Iranian Oil Company (NIOC) has awarded the early production from the Azadegan field to its subsidiary National Iranian South Oil Company (NISOC), NIOC managing director said during a meeting with the NISOC officials in Ahvaz.

Gholam-Hossein Nozari added that NISOC was granted the project because of its good performance during last Iranian year (ended March 20, 2007).

Azadegan is one of the world’s giant untapped oilfields, with in-situ reserves estimated at 26 billion barrels.

To develop it, the NIOC signed a $2 billion deal with Japan’s INPEX in February 2004, in which the Japanese firm held 75 percent of stakes. But the deal met delays, in part due to rows over mine-sweeping operations at the field.

Disputes continued until last September when INPEX’s shares were reduced to 10 percent, based on an agreement with the NIOC.

Currently, NIOC marketing subsidiary Naftiran Intertrade Company (NICO) holds 90 percent of shares, with the operatorship awarded to the Petroiran Development Company (PEDCO), another subsidiary of the NIOC.

To start the development of the Azadegan, PEDCO has signed a deal with the National Iranian Drilling Company (NIDC) for drilling operations at the field.

Jashnsaz said, “With a 3.2 million barrel of oil output per day, National Iranian South Oil Company is the biggest and oldest oil company in Iran and the Middle East.

“This year marks the centenary of oil exploration and production in southern Iran and the NISOC plans to develop oilfields and boost Azadegan field’s output.

“Apart from the development plan of Azadegan that will define the master development plan (MDP) and its installations, NISOC has given top priority to the exploitation of six wells of the field.

“I predict some 17 million dollars is needed for the early exploitation of the field. There are a lot of oilfields in Iran, whose in place oil amounts to about 137 billion barrels. NIOC plans to exploit the oilfields protectively.

“About 13 trillion rials (1.4 billion dollars) has been earmarked and I believe that the fund, due to the NISOC’s major programs, should be increased. The major part of the budget goes to drilling operations of development and workover wells. Given the subsidiary and supplementary operations, including installation of well-head equipment, lines, and separators, some 70 percent of the fund is spent is this section. New wells, due to natural production drop, are drilled in all oil reserves of the world every year. The drilling of development wells is among the major programs of National Iranian South Oil Company. In the previous year, 59 development wells equaling to 217,330 meters were drilled.

“We face lack of drilling rigs. So, we have outlined plans and have received the permit to purchase 10 platforms in the current year. Other Iranian companies such as North Drilling Co. have received the green light to purchase four drilling rigs.”