Iran and Iraq share five oil fields, the most important of which are located in West Karoun. One of these jointly owned fields is Yadavaran, known in Iraq as Sinbad. Yadavaran is the second largest oil field in Iran, coming behind Azadegan.

Located 70 kilometers southwest of Ahvaz in Khuzestan Province, Yadavaran is estimated to hold 30 billion barrels of oil in place, 35% of which is light oil in the Fahlian layer. Experts have also said the field contains about 12.5 tcf of associated gas and 1.9 billion barrels of gas condensate. By estimate, about 2.7 tcf of gas and 397 million barrels of condensate are recoverable.

Output Up 20,000 b/d

An agreement for the development of the Yadavaran field was signed with China’s Sinopec in 2008. The field was agreed to be developed in three phases. Phase 1 came on-stream in November 2016 by President Hassan Rouhani. The Phase 1 development was aimed at the recovery of 85,000 b/d of oil. Following Phase 1 inauguration, sustained recovery from this field continued; however, Petroleum Engineering and Development Company (PEDEC) officials decided to enhance the oil production capacity of this field.

Hojjatollah Norouzi, chief developer of Yadavaran, has said that the field’s output capacity had increased 20,000 b/d in the past one year, 15,000 b/d of which had materialized. It is noteworthy that due to sanctions, Iran does not provide any data about its oil fields. As long as sanctions are effective, this policy will go on.     

Readiness to Launch Phase 2

Under the agreement signed for the field development, Sinopec is required to go ahead with the second phase development. However, the Chinese refused to do so for a variety of reasons including sanctions. Norouzi said that the Chinese company did not provide any plans, noting that Iran would go alone.

In May 2018, following numerous meetings with the Chinese contractors, the general framework of the project was approved by National Iranian Oil Company (NIOC). Sinopec was expected to prepare a master development plan (MDP) to be approved by the client.  

Based on the field’s MDP, $2 billion is to be invested in second phase development during which 75 100,000-barrel wells would be drilled. In Phase 3, the field would be producing an extra 60,000 b/d.

In 2020, in a bid to get out of stagnation in the development of 2nd phase of Yadavaran, NIOC once again offered the project to Sinopec. In case the Chinese company refuses to carry out its commitments, NIOC will choose a new contractor.

As Sinopec has not yet provided any express response to NIOC to develop the field based on the new MDP, citing international restrictions, the process of issuance of permit for the second phase development of Yadavaran using technical savvy and domestic resources is on the agenda of NIOC Board of Directors.

Norouzi said: “Currently, second phase development and increased production from this joint field in the shortest possible time would be of significance. It doesn’t matter whether or not the Chinese take part in this process. What matters is the materialization of development objectives in this field. What is clear is that the infrastructure for the second phase development of the field is already prepared and Iran is determined to achieve enhanced production objectives and develop remaining phases.

It is noteworthy that Iraq is in rivalry with Iran, over developing this field. But the point is that Iran and Iraq do not enjoy equal conditions. Iran is under toughest ever US sanctions while Iraq is provided with every technical and financial facility to develop its own section of the reservoir. 

Iran Firm on Joint Fields

Iran is determined to develop its shared oil fields. Despite tough oil sanctions, Iran has never halted its production and is firmly going ahead with its field development.

Iran is currently focused on developing joint oil and gas fields in order to increase the 7% share of these fields in national oil output. The country also hopes to reach the crude oil production capacity of 5.7 mb/d. Over recent years, Iran has shifted attention from independent fields to shared fields.

Capital transfer for developing shared fields has been another issue of concern for accelerating development of joint fields. The West Karoun cluster of fields is a priority option.

Untapped Reservoirs

Final development of oil fields in West Karoun for the production of 1.2 mb/d of oil up to 2021, would require about $25 billion in investment. With every 1% increase in the recovery rate, $33 billion in extra revenue would be generated. In that case, a total of 670 million barrels of oil would be recoverable for more than $670 billion (oil price estimated at $55). The Azadegan, Yadavaran and Yaran fields – all located in West Karoun – are estimated to hold 67 billion barrels of oil in place.

The oil fields in West Karoun are all green fields. The difference between these fields and other fields in Iran is that in the green fields, increased production would happen with development plans.

West Karoun covers an array of hydrocarbon fields starting from the city of Ahvaz and continue as far as Iran-Iraq border. The giant Azadegan and Yadavaran fields have been discovered in the past decade.  

2021 Horizon Oil Output

NIOC has thrown its weight behind West Karoun oil projects. Definitely, operating West Karoun projects would contribute significantly to increasing oil production capacity and guaranteeing energy supply security, which would subsequently boost Iran’s power of bargaining at international forums.

In its oil production projects, NIOC banks in on West Karoun. It hopes to bring West Karoun’s oil output to 1.2 mb/d this year.

6-Fold Oil Output

Iran’s oil production capacity from West Karoun fields stood at 70,000 b/d in 2013, which has now reached 400,000 b/d, which means six-fold increase in seven years.

Minister of Petroleum Bijan Zangeneh has said that oil production capacity at West Karoun fields would reach 1 mb/d in the near future.

The end of COVID-19 crisis and economic prosperity in various nations means the world would have to develop renewable energies. Oil and gas-rich nations would be playing a decisive role in the global economy. Iran sits atop 12% of the world’s oil reserves, coming third after Venezuela and Saudi Arabia in terms of crude oil reserves.

According to BP statistics for 2018, Venezuela holds 303.3 billion barrels of oil in place (17.5% of world total) and Saudi Arabia owns 297.7 billion barrels of proven crude oil reserves, i.e. 17.2% of world total. Based on BP data, Iran was estimated to hold 155.6 billion barrels of proven crude oil reserves. i.e. 9% of the world total. But the discovery of another 53 billion barrels over recent years, would bring Iran’s share to 12%.

Courtesy of Iran Petroleum