The following is the full text of the interview Asakareh gave to" Iran Petroleum":

Three years ago, TENCO was cleared by Iran’s Petroleum Ministry as an E&P company. How many memorandums have you signed since then? How many of them have been finalized as agreements?

Since 2016 when the issue of E&P companies was raised at the Petroleum Ministry and some companies were qualified, TENCO decided to step into upstream oil sector. Of course, we are new in this sector, but we reconsidered our framework of activities to comply with E&P. After being qualified by the Petroleum Ministry, we signed five MOUs in early 2017 with National Iranian Oil Company (NIOC) for developing the Azadegan (South Azadegan and North Azadegan), Mansouri, Ab Teimour, Farzad A and Farzad B fields. Following that, we entered into talks with National Iranian South Oil Company (NISOC) for developing oil fields based on a specific framework of agreement. The Russian companies Zarubezhneft and Tat Neft, Pergas consortium and Pasargad Oil Company were our rivals. Concurrently with receiving data, we embarked on our talks with domestic and foreign companies for field development. To attract investment, we pursued a variety of options like finance, usance and loans in order to develop the fields and find a clear perspective about the economic viability of the projects to know which model would fit field development projects. Regular meetings were held with the NIOC Engineering and Development Department. In conclusion, NIOC recognized TENCO as a company qualified to develop oil fields. We have already won confirmation for our investment and economic models.

How come no agreement has been signed so far?

We must have a foreign partner for field development because development of fields needs certain technology. We have signed an MOU with a major foreign E&P companies and we expect the agreement to be signed for this field by 2020.

Due to the certain conditions imposed on Iran’s petroleum industry due to sanctions, we will not reveal the name of foreign companies until we sign agreements. However, we are currently in talks with them about terms and conditions of partnership.

How will the field be developed?

This field is among newly discovered ones in Khuzestan Province. It comprises of the Asmari and Bangestan reservoirs. NIOC was mainly focused on the Asmari reservoir, but we plan to develop both reservoirs over a 10-year period. The agreement is subject to renewal for 20 years.

In which section of the field do you need specific technology?

We have the asphaltene problem in the Bangestan reservoir. We need technology to resolve this problem. Of course this problem has not become serious and we can start planning for its resolution. But application of technology would depend on our final negotiations with our would-be foreign partner. After signing agreement, we will draw up an MDP within a specific timeframe.

What installations would be built throughout the implementation of the project?

Surface facilities would not need development; however, we will establish several desalination units, as well as wellhead installations in order to enhance recovery. Now if the Petroleum Ministry envisages building petro-refineries, I think there is a possibility of building petro-refineries. One positive point with the development of this field is that unlike such fields as Ab Teimour that need enhanced recovery from day one, in this field our conditions will be better and I believe that our field will be attractive to foreign investors due to the fast rate of return.

How much investment is estimated to be needed for this development project?

Since we have a foreign partner for this development project, the contract value has not been finalized. However, I think that we can bring the field’s output to a desirable figure with $1 billion over a 10-year period. The share of companies has not been specified in the field development, but we have basically agreed in our talks that our company’s share would be 20-50%.

When do you expect this agreement to be signed?

We expect this development agreement to be have been signed by 2020. But for whatsoever reason the foreign party pulls out in the final stages, we will have no problem with development. However, I would like to stress that foreign companies’ presence is important in terms of financing and sophisticated drilling technology with a view to enhancing the rate of recovery, which would help accelerate the project.

Have you held any talks for enhanced recovery?

Yes, of course! In the Ahvaz 235 project, run by National Iranian South Oil Company (NISOC), our talks are in the final phase and we are close to signing an agreement. That would add 72,000 b/d to the Ahvaz 235 project. That is partly due to enhanced recovery and partly to avoid fall-off in output. The project is to be implemented over a two-year period. The Ahvaz 235 project for the maintenance of production is one of the largest onshore projects in NISOC-run areas. Normally, we provide 20% of equity and NIOC will provide the rest, but we have said we would account for 35% of equity. This project will require drilling 31 wells and workover of 12 other wells. We will also account for the renovation of surface installations including purchase, installation, implementation and overhaul. An advantage with this project is the allocation of 4% of this sum to eradicating poverty in Khuzestan Province, which would generate a big capacity for job creation. Our priority would be to recruit local people.

Will you benefit from any foreign partners in this project?

Sure! We have held talks with a foreign company deemed qualified by NIOC. Since the foreign party is private-owned we are hopeful that our talks would come to fruition.

Will you bid for any other project?

We will definitely bid for more projects in the future. We are currently planning to bid for the Ahvaz 14, Ramin and Maroun projects.

Last March, TENCO was assigned the project to study the Toudaj exploration block. Which phase are studies in now?

The Toudaj block is located above the Eram gas field and near the Sarvestan and Saadatabad fields. Based on NIOC data, technical studies have been concluded and we have submitted our technical proposals to the NIOC Directorate of Exploration. We are ready to sign an agreement.

Is developing this block economically viable?

Studies on exploration blocks are always high-risk. That is why domestic companies hesitate on entering this sector independently. Since this is the first time NIOC is trusting Iranian companies in this sector and has decided to assign studies on exploration blocks to Iranians. we expect more flexibility so that other Iranian companies would dare enter this sector.

What kind of flexibility do you mean exactly? Risk is an inevitable part of exploration studies and companies enter talks based on such knowledge. Is oil potential always known?

Yes, that’s it. Let me provide you with an example. We have to spend $35 million on this project. If our studies reach conclusion, NIOC would pay back all fees. But if no conclusion is reached, we will receive no compensation. That is the risk with exploration block studies. However, I think that we can be flexible. I have to note that we are ready to sign agreement with the Directorate of Exploration on the Toudaj exploration block.

Do you see this block development economically viable based on technical studies?

We have reached good results in our studies. Since this block is situated near the Saadatabad and Sarvestan fields, as is the case with the Namavaran reservoir, these fields are likely to be connected. Of course we do not expect exploring any big field. We have established contracts with Iranian and foreign experts and we benefit from their advice. We are assured that we have oil and gas in this block. We even know at what depth we can reach oil and gas. However, we are not sure about the volume of reserves and the economic viability of the block. In fact, we have not yet realized if this project is economically viable. If it turns out to be viable, we will certainly develop it on our own.

Will this issue be included in this text of the agreement?

Our agreement has two sections. In the first section that would last two to three years, we will drill exploration wells and conclude the exploration phase. If the block is apt for development, we will go into the next section that involves the development of the field.

Are you involved in seismic testing, too?

Yes, of course. We signed the 3D seismic testing for Paniz in October 2019 with the Directorate of Exploration. It is the toughest water-earth project in the Middle East, whose implementation is of high significance to us. We have also recently participated in the tender bid for the Darregaz and Zarrineh Kuh 2D seismic testing projects near the border with Turkmenistan and we won the tender bid. It has been endorsed by the Petroleum Committee and NIOC Board of Directors. We have also taken part in the bid for the Gachsaran seismic testing project. We also plan to bid for the Arvand seismic testing project which is a full finance project.

Courtesy of Iran Petroleum