Iran has finally decided the fate of Farzad B, an untapped gas reserve in the Persian Gulf which is shared with Saudi Arabia, as a domestic company takes on to develop the gas field after original contractors from India failed to kick off the job.
Petropars was awarded the contract for Farzad B development in a Monday ceremony attended by the Iranian Oil Minister Bijan Namdar Zanganeh and senior officials from state-run National Iranian Oil Company (NIOC).
Petropars will develop the gas field, located over 200 kilometers from Iran’s southern coats of the Persian Gulf in the Farsi offshore block, within five years with an investment of around $1.78 billion.
The development work would include installation of two drilling rigs on eight wells and additional operations for construction of two separate 220-kilometer undersea pipelines, according to Reza Dehghan, NIOC’s deputy for engineering and development who signed the contract with Petropars.
The map shows oil and gas fields in the Persian Gulf
A consortium of Indian companies had carried out exploration work in the field in 2008. However, Iran decided to contract Petropars after the Indians stalled the job for a long time over fears of getting entangled in US sanctions on Tehran.
Dehghan said the development of Farzad B would be complicated and less economical compared to works done in recent years in South Pars field, the Iranian part of the world’s largest gas reserve which is also located in the Persian Gulf and shared with Qatar.
However, the NIOC official said production from the field would ensure Iran’s interests are protected in a reserve where Saudi Arabia has already started production.
Estimates suggest that the larger gas reserve in Farsi offshore block which is shared with Saudi Arabia holds 30 trillion cubic feet (tcf), or nearly 85 billion cubic meters of gas. However, some 16 tcf of around 23 tcf held in Farzad B is recoverable.
Petropars is expected to reach 1 billion tcf (28.3 million cubic meters) of production in farzad B based on the contract signed on Monday.