U.K.-based Enterprise Oil plc announced on December 19th that it had reached a deal with Iran’s Petropars for a stake in the development of the massive South Pars natural gas and condensate field.
Under the agreement, Enterprise gained a 20 percent interest in the sixth, seventh and eighth phases of the South Pars development project and will also have a proportionate interest in the service contract signed by Petropars and National Iranian Oil Co. (NIOC) in July.
South Pars is Iran’s largest gas field, with an estimated 12 trillion cubic feet of gas, representing nearly 7 percent of world reserves.
Enterprise Chief Executive Pierre Jungels said that: “This is our first major involvement in Iran’s oil and gas industry and an important first step in building a profitable business in the country.”
Gross project costs of the service contract, of which Enterprise will bear a proportionate share, will total $2.65 billion over a period of six years.
The three phases are expected to produce 3 billion cubic feet of gas per day, 120,000 b/d of condensates and nearly 3,300 tones per day of liquefied petroleum gas (LPG).
Enterprise will work in conjunction with Petropars on all aspects of the development, while leading in the offshore portion of the project, which involves drilling some 30 production wells.
In addition to providing technical assistance on the project, Enterprise will also contribute up to $15 million towards the cost of an appraisal program slated for 2001.