Chinese contractors had been seeking to fill the gap in Iran’s oil industries with Royal Dutch Shell, French Total, and Italian Eni had left the country to avoid the biting of the US sanctions; now the much vaunted JCPOA which had raised the expectations of observers that EU giants would return Iran, has brought no such boons for Iran’s antiquated oil industry, thus Chinese companies are the sole contractors Iran’s NIOC would rely in efforts to renew the industry. In line with that, NIOC has reportedly signed a deal with a Chinese company CNPCI once it annulled a deal to develop the same Asmari formation in 2011.
The company is a third Chinese oil company coming to Iran after Sinopec (China Petroleum & Chemical Corporation) and CNPC (China National Petroleum Corporation) had been already working in Yadavaran shared oil field and North Azadegan. Gholamreza Manouchehri, NIOC deputy-head told reporters that an Iranian delegation visited Beijing last week to negotiate a deal to improve rate of recovery in Masjed Soleiman oil field in Asmari formation. CNPCI will resume accordingly its activity in the oil field for the second time after an unsuccessful interaction with NIOC when the latter had opposed the deal unilaterally.
Ebrahim Piramoun, head of NIOC’s local office in Masjed Soleiman told reporters on Monday that in-place oil reserves in this Oligocene–Miocene formation is 6.5bn barrels, and since the time of Knox D’Arcy in 1907, only 18 per cent of the reserve had been extracted; “99 per cent of extractable oil (a figure different than in-place oil) has been depleted; the field is in terminal years in its lifecycle, with remaining oil trapped in lithospheric cracks and only improving rate of recovery through IOR and EOR would make possible production of oil from the field,” he told the press.
Gholamhossein Babadi of National Iranian South Oil Company (NISOC) had told reporters in 2014 that Masjed Soleiman had ceased to produce oil. He had attributed halting operation to technical glitch in facilities. The oil field now produces 28,000 barrels of crude daily. The deal with Chinese company is estimated to be $ 200m. Over the past century, about 1.1bn barrels of crude had been produced from the oil field and it is estimated that roughly another 5bn barrels would potentially be extracted. It is projected that Chinese company improve the recovery rate of the filed to 50,000 barrels per day, thus improving it 30,000 barrels per day, while independent estimations also indicated that this rate would still be improved to 80,000 barrels per day.
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