Project Name: NIOC – Azadegan Oilfield  Development
Name of Client: NIOC – National Iranian
Oil Company

Budget:  $2,000,000,000
Main Contractor: Inpex/Japex/Tomen
Facility Type: Production of Oil
Status:  Pre - FEED
PMC: Iran Itok
Location: Azadegan
Project Scope
Project scope includes the overall development of the field.
The Azadegan Field is believed to have recoverable reserves of 6,000,000,0000 barrels. Anticipated production from the field will be 300,000 bpd.
The onshore Azadegan Field was discovered in 1998 and was heralded as the largest discovery in the country in 30 years. The field located in the southwestern province of Khuzestan, near Ahvaz,not far from the Iraqi frontier,covers 520 sq km.It holds estimated reserves of 26 billion barrels of oil from which 5-6 billion barrels are considered recoverable with a potential output of as much as 400,000 bpd. During the first stage of that development, it is planned that some 120000 b/d of oil will be produced, then, as the development progresses, the output is projected to be ramped up to about 350000 b/d toward ultimate peak production of 400000 b/d.
Sub Contractor(s):
• Oil Exploration Operations Company (OEOC) for 3D Seismic;
• Japan's JGC/Foster Wheeler for conceptual design;
• E&I for the mine-clearance operation;
• Norwegian DNV and the Iranian Afza Mohit for HSE; and
• British Veritas for processing of data gathered in the 3D seismic.
Project Status
The 1998 discovery of Azadegan was hailed as one of the largest in recent times. The field has estimated recoverable reserves of 26 billion barrels.
The Japanese consortium aiming to develop the landmark $2,000 million Azadegan field has collapsed with the withdrawal of at least one partner. Major international oil companies (IOCs) are now expected to step in to the project, with France's Total said to be in talks with the Japanese.
Tomen Corporation, one of the three partners that won exclusive negotiating rights on the field in June 2001, said in late February that it would not be part of the drilling team and its participation in the project was solely limited to business advice. Japan Exploration Company (Japex) is also widely reported in Tokyo to be preparing to pull out of the project for economic reasons. Negotiations on the deal were fiercely contested for eight months after the expiry of the two-year exclusive period.
Another Japanese state company, Japan Oil Gas & Metals National Company, which is soon to acquire Japan National Oil Company, is to take about half of the Japanese share of the project. Iran will hold a 25 per cent equity stake in the field development company through Jersey-registered state oil financier Naftiran Intertrade Company.
Now foreign companies are likely to be asked to participate. Early attention has focused on Total, which has worked closely with the Japanese consortium leader Inpex Corporation on projects in southeast Asia. Other potential partners include Norway s Statoil, Russia s Lukoil and China’s Sinopec, all of whom expressed an interest in leading a development team before the Japanese consortium signed. Petrochina and India s ONGC Videsh have also been touted as possible participants.
The preliminary operation of development plan of Azadegan, inclusive of processing the gathered 2D and 3D seismic data from the oil field and mine -clearance, is underway. Japanese companies are currently processing the 3D data, which has been gathered by the Iranian Oil Exploration Operation Company (OEOC).
Project Structure
The project will be implemented on buy-back basis. LSTK
Inpex owns 75 per cent of the development rights for the oilfield, and is looking to sell about 20% to foreign companies to diversify risk.
Schedules for this Project
1998 Discovery of Azedegan   Field
2000 Enquiries for bids for Field   Development issued
November 2000  NIOC start drilling first two  appraisal wells
July 2003  Japanese Consortium    Negotiating Exclusivity
 extended until
 September 2003
October 2003  Japanese consortium    Exclusive Negotiating    Rights lost
18th February 2004  NIOC sign Field    Development Agreement   with Japanese Consortium
 2005  Scheduled Start Up
End-June 2006  Deadline to determine if the  project will continue with or  without INPEX
2010  Completion of Field    Development