China is set to invest US$2.5 billion in South Azadegan oilfield on Iran’s border with Iraq the Iranian news agency Mehr reported Friday.
“According to the final agreement, China will invest $2.5 billion in the field,” Mehr quoted Naji Saadouni, president of Iran’s Petroleum Engineering and Development Company (PEDEC), as saying.
The PEDEC president did not however specify which Chinese firm would take up the project.
The Azdegan field currently produces 55,000 bpd and it is expected to increase output to 320,000 bpd after the completion of the first phase of the project which is currently underway, according to the Tehran Times.
Completion of the second phase will boost the oilfield’s output to 600,000 bpd, the newspaper reported.
In 2009, the China National Petroleum Corporation (CNPC) and the National Iranian Oil Company (NIOC) signed a $1.76 billion deal to develop the North Azadegan oilfield. The oilfield is expected to produce 75,000 bpd.
It is estimated that the Azadegan oilfield has a 42 billion barrel reserve, according to the Tehran Times.
China’s Sinopec is said to be currently engaged in the Yadavaran oilfield which is adjacent to Azadegan oilfield.
Iran produces about 3.7 million bpd and is the third largest exporter of crude oil to China.
Iran is OPEC’s second largest producer of oil after Saudi Arabia, the world’s largest oil producer.
