Iran’s draft budget proposal for the year beginning March 2001 allocates up to $2.8 billion for investment in the country’s massive Azadegan oil field through buy-back deals, according to an Iranian newspaper on December 13th.
The field, located in the southwestern province of Khuzestan near the Iraqi border, is the world’s largest find since the 5.5 billion barrel Priobye field was discovered in Russia in 1982.
Azadegan has an estimated 6 billion barrels of recoverable reserves, and production from the field is expected to reach up to 400,000 b/d after several years of development.
At current estimates, the field, measuring 200 square miles, could bring in total revenues of $100 billion.
In early November, Iran and Japan reached an agreement to grant Japanese firms priority rights to discuss the development of the field after a landmark visit to Tokyo by Iranian President Mohammed Khatami.
Japanese oil firms interested in developing part of Azadegan have until June 2001 to submit proposals to the National Iranian Oil Co. (NIOC). Iranian oil officials have said, however, that other firms can submit bids after the June deadline.
U.S. oil firm Conoco Inc. had conducted seismic analysis on the field in the anticipation of securing negotiating rights for the field, which it had hoped to develop after the easing of U.S. unilateral sanctions against Iran.
Conoco’s involvement in the field prompted a U.S. Treasury Department investigation into the company’s work in Iran.
Industry sources had suggested that the deal with Japan was aimed at luring Western oil firms, such as Conoco and BP Amoco, to help develop the field and to push for a lifting of sanctions.