The HOA was signed late Wednesday in a ceremony attended by Petroleum Minister Bijan Zanganeh and senior officials of the oil industry and British Ambassador to Tehran Robert Macaire.
The agreement was inked by Director of National Iranian South Oil Company’s (NISOC) Bijan Alipour and London-based Pergas Consortium Managing Director Colin Rowley.
An HOA is a non-binding document that needs to be adopted into a parent contract in order to be enforceable. Once the contract is finalized for the development of Karanj oilfield, it could be possible to produce a maximum of 200,000 barrels per day and a total of about 655 million barrelsover the next 10 years.
Direct capital costs are estimated at $1.167 billion and indirect costs at $187 million.
The key parts of the contract include boosting wells' pressure by increasing gas injection by three times, establishing compressor stations, construction of facilities to harness and transfer the associated petroleum gas (APG) with the capacity of 280 million cubic meters per day, establishment of desalting units to process 100,000 bpd of crude, drilling 35 new wells, and upgrading 15 other wells.
“We hope that the UK government ... endorses the agreement,” Iranian oil minister Bijan Zanganeh said during the signing ceremony.
Zanganeh added that he expected European countries to make up for the US betrayal of the nuclear deal, and support Western companies that sign deals with Tehran.
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