Iran’s state-backed Mehr News Agency reports that the country’s Oil Ministry has followed through on its warnings to Russian gas giant Gazprom and appointed a local consortium to operate the on-shore Azar oilfield.
According to Mehr, the $1.9 billion deal will see the local consortium – unnamed by either Mehr or oil officials – develop the field within six year to produce between 50,000 and 65,000 barrels of light crude per day for 25 years.
Azar is a cross-border field shared with Iraq, where it is called Badra. Reserves on both sides total around 400 million barrels.
The news following reports yesterday that Gazprom had been booted out from Azar and the Oil Ministry had suspended CNOOC’s operation of the North Pars offshore gas field, also ostensibly over delays to field development. CNPC has downed tools over delays to development of phase eleven of the South Pars gas field, from which reinjection gas is needed to maintain pressure at flagging oil wells onshore.
Some analysts at the time though the move was part of the Ministry’s more mucular posturing under the stewardship of former Republican Guard Rostam Qasemi, but it now transpires Iraq – having previously kicked out IOCs and western companies in favour of Russian and Chinese firms – is increasingly happy to go it alone.
Analysts say Iran only has itself to blame for slow progress. The Oil Ministry has seen an exodus of technically-able officials in favour of more fervent supporters of the Ahmedinejad regime, leading to reports of government mismanagement and a lack of technical understanding needed to reverse the country’s production decline. Sanctions and a poor business environment also make the logistical aspects of developing fields difficult.
