Japanese oil firms interested in developing part of Iran’s giant Azadegan oil field must submit proposals by June 2001, an Iranian oil official said on November 5th.
Japan and Iran had reached an agreement on November 1st to grant Tokyo negotiation rights for the appraisal and development of a portion of the field, which has estimated reserves of up to 6 billion barrels.
The Japanese Petroleum Exploration Co. (JAPEX) and Indonesia Petroleum Ltd., also based in Japan, have been chosen by Tokyo to participate in the discussions.
A representative from JAPEX indicated that the government could consider developing the field in conjunction with foreign oil firms. Azadegan is the largest discovery since the 5.5 billion barrel Priobye field was found in Russia in 1982.
The field is expected to produce 300,000-400,000 b/d after several years of development, earning revenues of more than $100 billion. Oil was first discovered at Azadegan, located in the southwestern Khuzestan province near the Iraqi border, in September 1998.
U.S. oil firm Conoco Inc. had conducted seismic analysis on the field, in the hopes of securing negotiating rights for the field, which it had hoped to develop after an easing of U.S. unilateral sanctions on Iran.
Conoco’s involvement in Iran has prompted a U.S. Treasury Department investigation into the company’s work on the field. Industry sources tell Oil Navigator™ that Iran may well be playing the “Japan card” in an effort to lure in Western oil firms like Conoco and BP Amoco to help develop the lucrative field and to push for a lifting sanctions, under which U.S. firms cannot invest more than $20 million in the country.