9 June 2022 - 17:45
  • News Code: 457942
Integrated Azadegan Development

TEHRAN (Shana) -- Minister of Petroleum Javad Owji has said the second phase development of the giant South Azadegan oil field would be implemented by local firms. The first phase of this field, which is among the West Karoun cluster of fields, has been developed by local contractors to reach the nominal output of 220,000 b/d by next March.

North Azadegan field had been developed beforehand and is currently supplying oil. Given the significance of developing joint fields, National Iranian Oil Company (NIOC) is considering integrated development of the Azadegan field. The question here is to know if integrated development would affect oil recovery from the North and South Azadegan. 

The West Karoun fields are among the youngest oil fields in Iran. They are North Azadegan, South Azadegan, North Yaran, South Yaran and Yadavaran, totally holding 64 billion barrels of oil in place.

South Azadegan is estimated to hold 25.34 billion barrels of oil in place, while North Azadegan is estimated to hold 5.6 billion barrels.

Iran’s recoverable oil and gas reserves are respectively estimated at 157 billion barrels and 33 tcm. Iran holds more than 1,200 billion barrels of oil equivalent in oil and gas reserves in place.

Given energy transition and efforts by oil producers to recover more oil and boost revenue, Iran’s Petroleum Ministry is naturally prioritizing development of oil and gas fields. However, development of joint fields takes up added significance due to recovery by the other party. CEO of NIOC Mohsen Khojasteh-Mehr has said that $8 billion would be invested in developing West Karoun fields. One related project would be second phase development of South Azadegan, which would be operated by a consortium of Iranian companies. But it does not mean Iran shuns foreign investment. NIOC welcomes foreign investors and companies in oil and gas field development projects.

Master Development Plan

The vast Azadegan field has been divided into North Azadegan and South Azadegan. These two fields had been developed separately, but a master plan is being studied for the integrated development of the entire field. Under MDP, the field would see its output total 570,000 b/d.

Given independent development of the North and South Azadegan fields, can integrated development harm the balanced development of the field or slow down its pace or can contractors go ahead with the integrated development of the field based on the infrastructure available in both sections? Project managers say integrated development of this field would not have any impact on its activity and therefore contractors may go ahead with integrated development without any problems.

Azadegan is attractive to investors thanks to its quick rate of return on investment.

In this report, we are offering our readers a review of the latest development efforts in the field whose enhanced recovery is on NIOC’s agenda.

Drilling 36 Wells

The South Azadegan field was initially developed by a Chinese contractor. But after the Chinese firm was expelled, Petroleum Engineering and Development Company (PEDEC) teamed up with local contractors to develop the field. Talks are currently under way for the second phase development of the field. Recovery from the first well drilled in south Azadegan occurred in 2007. Accumulated oil production from the field reached 250 million barrels in March. So far, 160 wells have been drilled and completed in this field with 36 more wells planned to be spudded in the current calendar year to 20 March 2023. A total of 11 drilling rigs are operating in South Azadegan, which would increase to 13 in coming months.

Production from South Azadegan is expected to increase in the current calendar year. It has to be noted that PEDEC focused on South Azadegan in the second half of last calendar year (ended on 20 March 2022). In addition to accelerating integrated development of phase 1 of the joint field after a long hiatus, planning began to make up for delays and also to benefit from maximum capacity available with a view to increasing production from the wells drilled in the field. The new wells were decided to become operational in the short-term and at minimum costs.  

Before the end of last calendar year, 13 wells with an output rate of 15,000 barrels were completed and launched to increase daily output from this giant oil field. Six more wells would become operational during the first two months of the current calendar year.

According to plans, with the completion and operation of more than 40 more wells in the current calendar year, production from this field would increase further. In case everything goes ahead as planned, 70,000 b/d would be added to the current output of this joint field.

In South Azadegan, the API gravity of heavy crude oil in the Sarvak layer varies between 17 and 21, while the gravity varies from 29 to 35 for light oil in the Kajdomi, Fahlyan and Gadovan layers.

CTEP Development

Operating the Central Treatment Export Plant (CTEP) is under way despite past challenges. The priority in this project is to launch two oil trains on 20 March. Most commodities have been procured and work is in progress. Pipe rack installation, underground pipe laying, setting up oil storage and firefighting water as well as processing buildings have progressed significantly. CTEP’s products include processed oil, which would be carried to the West Karoun pumping station via a 50-km-long pipeline and sour gas, which would be moved to a gas plant via a 15-km-long pipeline.

7% Recovery

China’s CNPC developed North Azadegan based on a buyback deal. North Azadegan first started oil supply in March 2016. Accumulated output has since reached 150 million barrels.

Production from North Azadegan was assigned to the Arvandan Oil and Gas Production Company last August. Of a total 58 wells drilled in this field, 51 are producing oil. A key point with North Azadegan is its location in the Hoor al-Azim wetland. In light of the significance of preventing this wetland from drying up, all development operations including drilling, acidizing a well as surface operations have been performed in full respect of environmental obligations. For this purpose, a safety and environment checklist has to be completed and endorsed by relevant officials for any operation.

Production from North Azadegan is based on natural recovery and gas artificial lifting. The recovery rate of this field is about 7%, which is acceptable for ultra- heavy crude oil. 

Domestic Manufacturing

Using domestically manufactured commodities is among objectives of development of North and South Azadegan oil fields. In North Azadegan, Iran has a 51% share in commodities and services. In South Azadegan, all contractors involved in the project are Iranian.

As the field is planned to be developed in an integrated manner, it has to be noted that integrated development would not affect the current production from North Azadegan. Meantime, in case development operations begin in this field, due to the facilities and equipment in phase 1, the field would see its output jump quickly. Furthermore, due to the good experience of local contractors, the planned integrated development of the Azadegan field is expected to go ahead satisfactorily by local contractors.

Courtesy of Iran Petroleum

News Code 457942

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