Iran, Azerbaijan consider joint Caspian Sea development

The presidents of Azerbaijan and Iran have signed protocols for development of a jointly owned deep-water oil field in the Caspian Sea, according to a report in Iran Petroleum published by news service Shana.

If ratified, the two countries would recover the oil on a 50-50 basis. National Iranian Oil Company has assigned Khazar Exploration and Production Company (KEPCO) to work on Iran’s behalf.

KEPCO CEO Mohsen Delaviz said various options are under review, including forming a SOCAR-KEPCO joint venture to attract investment and technology in this sector.

He added that development of the 30 Bboe-plus field would cost at least US$10 billion, and that since Caspian Sea reservoirs are typically in sandstone they are likely to have a higher rate of recovery, so KEPCO would expect to recover more oil.

There would also be a need to engage companies experienced in operating in deep-water.

Mr Delaviz expected finalising the agreement with SOCAR to take up to two years, followed by a further three to four years for development. So, production could theoretically start in seven years.

He also expected development of Iran’s deep-water Sardar-e-Jangal oil field to cost in the range of US$7-10 billion, with Iran open to foreign investment in the project.

Source: Offshore Magazine