He also announced that Iran’s Petropars would develop the Farzad field after India did not step in despite its interest in this field.

The following is the full text of the interview Meshkinfam gave to “Iran Petroleum”:

How much gas is Iran currently recovering from South Pars?

The South Pars gas production capacity currently stands at 700 mcm/d, up 70 mcm/d year-on-year. This increase has been achieved from SP13, SP14, and SP22-24. SP16 had stopped production after it was damaged, but now it has resumed production.  

Why had it been damaged?

The pipeline had suffered serious corrosion due to sour gas supplied by South Pars. We called in an international consultant to figure out the reason. SP16 lies in the middle of the field and on the border strip. It was very important for us to resolve the problem soon to restart production. However, due to sanctions and the coronavirus, travels have become very difficult and that is why it took longer than normal. Otherwise, it was not so difficult.

You pointed to the coronavirus. Given the fact that South Pars supplies 80% of Iran’s gas, how have coronavirus restrictions affected your performance?

All nations in the world are dealing with the coronavirus. Covid-19 has affected the economy of all nations, but we have sanctions too. Therefore, our problems are doubled. However, as the Minister of Petroleum noted, our oil and gas production did not stop even a single day under such tough sanctions. Respecting health protocols, we did whatever necessary to stabilize production in South Pars. Last calendar year, we operated 26 platforms and we plan to operate another 36 in the current Iranian calendar year to March 2021. Over this period of time, we have overhauled the platforms despite coronavirus-imposed bottlenecks. We also acidized the wells and acidizing is under way in the wells of platforms in SP13 and SP22-24 that have just entered the production phase. That may sound very easy, but given being under sanctions while faced with the coronavirus, you will notice that it has been a tough job, but we have made sure people would not worry about their gas consumption.

How much has the coronavirus affected the SP11 development?

First, let me tell you some points. In late May, the jacket of the 2,200-tonne 11B platform was installed and we are now making preparations to start drilling at this phase. MAPNA is the contractor for drilling in this phase and the drilling rig was recently installed on the location. MAPNA is to drill 12 wells. It would first drill and complete five wells and then we will start production. Drilling each well takes 70 days. Therefore, we hope to start gas recovery from this phase next Iranian calendar year. The coronavirus has already affected this project and it slowed down the work somewhat in the first months following the coronavirus outbreak.

When the agreement for developing this phase was struck with Petropars, early production was set to start in 2021. Now, with the coronavirus, is the same scheduel still applying?

That’s true. When the agreement was signed for SP11 development with Petropars, there was no coronavirus. However, these conditions have been imposed upon everyone, thereby slowing down the project. But we can make up for this delay during drilling. We will ask the contractor to expedite the work.

What have you done to prevent South Pars production loss?

We have not yet seen any tangible loss in the South Pars output. Of course, in one of SP12 platforms we have experienced production loss. We forecast a 28 mcm/d cut in the South Pars output over four years. We started conducting comprehensive studies several years ago to prevent any production loss. We expected Total to bring in technology for pressure booster platforms to SP11, but it is out of the question for the time being. We will use gas from the Farzad, North Pars, Belal, Kish, Golshan and Ferdowsi fields to compensate for the South Pars production loss. In fact, development of these fields and gas production by them would be a counterbalance to the production loss in South Pars. For instance, offshore production from the Farzad and North Pars fields has been done and the gas is transferred to Site 1 and Site 2 refineries of the South Pars. We will no longer build any refinery to process gas supplied by these fields and will use their gas to make up for the South Pars production loss.

Where does Belal field development stand now?

The agreement between POGC and Petropars for the development of this field was signed in September 2019. This agreement, which will be attached to the buyback agreement for the comprehensive and integrated development of SP11-24, will aim at the production of 500 mcf/d (14 mcm/d) of rich gas over 34 months. The gas from Belal will go to the SP12 refinery for treatment. Petropars will drill eight wells for developing this field. It will also install a drilling rig. Necessary studies have been conducted and tender bids have been held.

Where does Farzad field development stand now?

Petropars is currently making engineering arrangements. This field holds very sour gas and therefore we have to deal with it prudently.

Although the agreement for Farzad development will be finally signed with Petropars, the Indians show willingness from time to time for this field. How likely is the Indians’ return?

We tried our best to bring back the Indians to the negotiating table. However, due to sanctions they are not eager to cooperate. On the other hand, they expect us to remain on standby so that they would come after sanctions have been lifted. They have been in talks with us for the development of the Farzad field for years, but have changed their mind in the last minute. The negotiation process has been prolonged. Now, it is our strategy to assign Farzad development to Petropars. Now, if the Indians are willing to develop this field they may work as a partner with Petropars. We will welcome any foreign investor in developing our oil and gas fields. However, we will not wait for them forever.

When will Farzad start production?

According to schedule, early production from Farzad will start within three years while full production is expected in five years. The gas supplied by this field will be used to make up for production loss in South Pars.

When will the agreement be signed for North Pars?

The gas in this field equals the production of four South Pars phases (4 bcf). There will be four platforms while 48 wells will be drilled. To develop the North Pars field, we are looking for a contractor to finance this project. Domestic companies have applied with National Iranian Oil Company for developing this field. NIOC is reviewing their qualifications for developing North Pars. Some of them are E&P firms and some others have financial capacity for development. We want to choose a contractor for the entire development of the field. But if contractors are not able to finance the entire field, the North Pars development may be divided into four phases.

The 32-inch and 56-inch offshore pipelines of the Kish gas field are now complete. When will this field start feeding the national trunkline?

The pre-commissioning of the 56-inch pipeline has begun. This project is aimed at linking Kish Island with Iran Gas Trunkline 7 (IGAT-7) and deliver gas to the Kish gas power plant. We intend to deliver gas in December. However, Kish gas field will be developed in three phases, which will in four years be supplying 3 bcf/d. Our main objective in the development of Kish gas field is to prepare for four years from now as South Pars will see its output fall. We intend to use this field’s gas to compensate for feedstock losses in eight South Pars refineries that may experience production loss.

NIOC has assigned Jask terminal offshore activities to you. How is it going on now?

The project is among NIOC prioritized projects. Its offshore section includes designing, manufacturing and installing three SPMs, a measurement system and offshore pipelines. The export terminal and three SPMs envisaged in this project would join the production chain by next March when we will be ready for the early startup of this project.

What is the most significant challenge you are faced with now?

As I mentioned, our top priority is to prevent a production loss in order to maximize output from South Pars. Under the current administration, we have made relevant decisions for all phases of South Pars and raised output by 420 mcm/d over the past seven years. But I would like to highlight that we are faced with certain conditions. Officials know how tough our job is in the South Pars, but we do our best to provide people with convenience. Some are criticizing us without taking into consideration the current circumstances. They think we are doing nothing. So how has the South Pars output increased? You know that 80% of our national revenue comes from selling oil. Over the past two years, Iran’s petroleum industry has experienced tough conditions due to the US’s withdrawal from the Joint Comprehensive Plan of Action (JCPOA). We have difficulties in exporting oil, and our revenue has dropped significantly. Nobody asks how oil is providing financial resources. For developing South Pars, about $84 billion has been invested so far. One-third of this sum has come from buyback deals, one-third from NIOC and one-third from National Development Fund of Iran (NDFI). There are no financial resources now, while NIOC and NDFI depend on oil exports. The issue is that the main source of income has been blocked and financial resources are out of reach. What should we do then?

Do you have any problems with financing South Pars now?

We have financial problems at South Pars, but we never quit. The country is faced with financial shortages due to sanctions. Under such conditions we are faced with many problems in implementing projects. We have maximized production from South Pars in the past seven years. We have completed 10 South Pars platforms that had not progressed for years. We increased the South Pars output 2.5 times and completed the South Pars refineries. The only remaining project in South Pars is the offshore section of SP11 and the refinery of SP14.

We have invested more than $25 million in this field over the past seven years. Except for 2.5 years following the JCPOA, we were under sanctions. It’s difficult for us to import equipment. Although 70% of equipment used in South Pars is manufactured domestically, we are faced with untold difficulties for supplying the remaining 30% due to sanctions. We are working under very difficult conditions. I believe that Petroleum Ministry did a great job as the gas flow never stopped. Our people are experiencing very tough conditions due to sanctions and the COVID-19 outbreak. But you must know that the conditions would be tougher if gas stopped flowing. We never let gas production in the South Pars halt. Although we are not exporting gas condensate due to sanctions, we have never reduced gas production rate. We are compared with other regional countries in terms of production and exports while conditions are totally different. I’m sure that Persian Gulf littoral states would not survive if they were to face similar pressures.

Courtesy of Iran Petroleum

by 

Negar Sadeqi