The signing in November 1999 of an agreement between the National Iranian Oil Company (NIOC) and Shell to develop the Soroosh/Nowrooz offshore oil fields, at an estimated cost of US $800 million, was a major step forward in the partnership between Shell and the Iranian Government for the development of Iran's oil and gas industry.
Robert Weener, Chairman of Shell Companies in Iran and Chief Executive Officer of Shell Development Iran, reports on the progress of the Soroosh/Nowrooz project, and goes on to talk about other important prospects which are being created and examined by Shell and its Iranian partners for the future.
These include: the development of three fields of the Bangestan reservoir in Ahwaz; a scouting study for the construction of a second-generation Shell Middle Distillates Synthesis (SMDS) plant; the further development of the South Pars gas field to provide feedstock for the SMDS plant; the completion of a joint study between Shell and the NIOC to examine the prospects of the South Caspian Sea, and the awarding of a Shell Centenary Scholarship to an Iranian scholar.
"We are very pleased with the progress that has been made to date in the Soroosh/Nowrooz oil field development project, which is both on schedule and within budget," says Robert Weener, Chairman of Shell Companies in Iran and Chief Executive Officer of Shell Development Iran.
"We have gone a long way towards fulfilling our promises to the Iranian Government and the National Iranian Oil Company [NIOC]. The project is providing significant benefits to all parties to the agreement, and we are learning a great deal from each other.
"It is also proving to be a tremendous example of partnership and co-operation, and we hope that this successful formula can be applied to other projects.
In fact, we are pleased to announce that we have submitted a proposal to the NIOC for the onshore development of three oil fields of the major Bangestan reservoir in the Ahwaz area.
"This onshore project aims to duplicate the success we are having with the development of Iran's oil reserves in the Soroosh/Nowrooz oil fields. However, in contrast to the Soroosh/Nowrooz oil fields, which are offshore, the three Bangestan fields will be in both urban and agricultural areas in the far southeast of Iran.
"This development will require Shell's commitment to sustainable development to be applied in all three areas - that is to say, the creation of wealth for the Iranian people, the safeguarding of the environment in the area in which we are operating and the need to ensure that our operations will bring benefits to the local people of the area.
"These three fields will continue to be operated by the NIOC, whilst the purpose of bringing in an international oil company to work with Iran is to raise production significantly."
He goes on to explain,"Another exciting development between Shell and Iran is the current study of the feasibility of the construction of a second-generation Shell Middle Distillates Synthesis [SMDS] plant, coupled with a new development phase of the giant South Pars gas field.
"Based on a Memorandum of Understanding, signed in September of this year, a team of experts from the National Petrochemical Company of Iran, the NIOC, and Shell Gas and Power is investigating the possibility of building an SMDS plant in Assaluyeh.
It would have the capacity to produce 70,000 bpd of ultra-clean middle distillates, such as diesel and aviation fuels, using as feedstock 600 million standard cubic feet per day of gas from the South Pars gas field.
"This project follows on from Shell's 12,000 bpd first-generation SMDS plant in Bintulu, in Malaysia, which is the first and only plant of its kind to operate worldwide.
After distribution by pipeline and the conversion of natural gas to Liquefied Natural Gas, SMDS technology provides a third independent opportunity to commercialize the vast untapped gas reserves of the world.
"The end product of the SMDS process is an environmentally friendly fuel product, free of all sulphur, nitrogen and aromatics. As a beneficial by-product, some 10,000 tones per day of pure water can be produced during the SMDS process to be used for irrigation.
"To provide the necessary feedstock for the SMDS plant, Shell could be involved in developing a new part of the South Pars offshore gas field, and this would be a continuation of Shell's involvement in developing Iran's offshore fields.
"Another exciting development is the completion of the South Caspian Exploration Study Agreement, which was our first project in Iran in recent times.
Together with KEPCO, the NIOC subsidiary responsible for the Study Agreement, Lasmo and Veba, we have nearly completed the Study and the final reports detailing the prospect for the discovery of oil and gas in the region will be handed over to NIOC shortly.
"We are envisaging detailed discussions with NIOC on the second phase of the project which could include the acquisition of 3D seismic and the drilling of exploration wells to test the identified structures.
"With water depths of up to 800 meters, the region represents technical and commercial challenges that will require the most from Shell's extensive deepwater exploration and production technology and experience.
"Finally, all these activities in Iran will require a large expansion of Shell's workforce in the country. We have therefore been recruiting Iranian staff in the past months and will accelerate this process in the future.
The development of our Iranian staff is a high priority for us and training is being provided at all levels.
"I am also pleased to announce the first-ever award of a Shell Centenary Scholarship to an Iranian scholar, Mr Dana Gharavi, who attained his scholarship in competition with applicants from all over the world.
This scholarship will allow Mr Gharavi to go on to do a post-doctoral degree course at a top university in the UK.
"Iran is a very attractive and pleasant place to work," he concludes, "and I am very excited about all the new opportunities that are arising to participate in the successful development of Iran's oil and gas industry. I also believe that Shell has an immense contribution to offer Iran."
Phil Watts, a Shell Group Managing Director and CEO of Shell's Exploration and Production Business, says, "The development of the Soroosh/Nowrooz oil fields is crucial to both Shell's Exploration and Production Business and to the successful enhancement of Iran's oil and gas industry.
"The project is part of Shell's global E&P policy to work more closely with Major Resource Holders, and I am very glad to say that the progress we are making in our relationship with the Iranian Government and the NIOC is very encouraging.
"We have a very strong team working closely with the NIOC on the project in Iran and have the full support of an operational team in Dubai.
"We expect the first well to be drilled in the near future and are very hopeful of the results."
Source: Shell Middle East
© 2000 Mena Report (www.menareport.com)