The first well was drilled at the field in 1976, but its discovery was finalized after drilling the second field in 1999.

The field has an approximate area of 900 sq. km. and includes northern and southern parts.

Sarvak, Kazhdomi, Godvan, and Fahilan are productive layers of the field. Crude oil produced by Fahilan layer is light while other layers yield heavy crude.

Azadegan development plan

One year after discovery of Azadegan oil field and subsequent to negotiations between Iran and Japan for development of the field, a Japanese consortium led by INPEX Company started seismographic studies there. Iran and Japan signed a contract worth 2 billion dollars for development of Azadegan oil field in February 2004 and the field was projected to yield 260,000 barrels per day crude oil by 2013.

According to contract, production was to reach 150,000 barrels per day in the first stage; which would have been increased to 260,000 barrels per day after completion of the second stage. According to the primary contract, 75 percent of the project was owned by INPEX while share of the Iranian NICO, which is affiliated with the National Iranian Oil Company, was determined at 25 percent.

Azadegan: Political differences

INPEX, most of whose stocks were owned by the Japanese government, refrained from living up to its commitments for developing Azadegan oil field due to certain problems. Existence of vast minefields was just one excuse used by the Japanese and they noted that as long as the lands have not been demined, INPEX would not be able to develop the field.

At the same time, demining had been finished up to a deputy of six meters and Iranian authorities had noted on various occasions that everything was ready for development operations. However, INPEX showed that it was not willing to go on with the contract and the most obvious reason for that decision was pressures exerted by the US administration on the Japanese government.

Finally, oil industry officials were fed-up with INPEX and, in October 2006, share of the company was reduced from 75 percent (which had been agreed in 2004) to 10 percent and 90 percent of the plan was given to the Iranian NICO to go on with it by drawing upon its skilled Iranian manpower.

Since NICO had no experience in upstream operations, the project was transferred to Petroiran Development Company, which is a subsidiary of NIOC, without legal transfer of the plan. Petroleum Engineering and Development Company was also appointed as representative of the National Iranian Oil Company and client of Azadegan development plan.

Azadegan: Early production

To realize early production from the field, National Iranian Oil Company asked Petroleum Engineering and Development Company and National Iranian South Oil Company to present their plans and, finally, the project was given to the National Iranian South Oil Company.

Early production from the field was discussed in a meeting attended by experts from National Iranian Oil Company. They maintained that the plan proposed by the Japanese INPEX will leave 96 percent of Azadegan oil underground and noted that INPEX plan was based on incomplete static information.

According to discussions at that meeting, early production from Azadegan oil field should aim at sustainable production from the field and the session led to changes in the plan which had been drawn up by the Japanese.

Technical plan for early production from Azadegan oil field, as projected by the National Iranian South Oil Company, included production of oil from six existing exploration wells, which had been drilled there from 1999 to 2003.

Production from those fields was given priority by National Iranian South Oil Company regardless of the comprehensive development plan of the field.

The plan include repair and completion of six existing wells, building about 90 km of flow pipeline from the wells, building two gas separation complexes and about 100 km 10-inch pipeline from Azadegan oil field to production plant No. 3 of Ahvaz.

Accessory operations included construction of access roads and pipeline routes and the wells are projected to produce up to 20,000 barrels per day oil. Early production from Azadegan oil field has been given to the National Iranian South Oil Company by National Iranian Oil Company. Operations have started three months ago and production at 20,000 barrels per day will start in three months.

Also, construction of a flow pipeline, repair of two wells, construction of two separation plants and a 10-inch pipeline is underway. Out of six wells, five wells have been completed and the wells are ready to produce 3,000-4,000 barrels per day.

In addition, caretaker of Ministry of Petroleum ordered production from the fields should be started at 50,000 barrels per day. To achieve that output, gas collection and drilling 15 wells would be needed and relevant studies have been started.

Azadegan: Domestic capability

Early production from Azadegan oil field is another manifestation of domestic capabilities of the Iranian oil industry. Successful implementation of the plan has refuted claims raised after reducing share of INPEX that Iran would not be able to develop the field in the absence of foreign companies.