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South Pars looks for drilling company for buy-back tender

MEED
17 November 2000

State-owned Pars Oil & Gas Company is about to select a rig company to drill two delineation wells at the South Pars offshore oil field in preparation for a buy-back tender scheduled for spring 2001 for the long-delayed South Pars Oil project.

Bidders for the drilling rig are the European arm of Schlumberger, the state National Iranian Drilling Company (NIDC) and Naftkav Engineering Services Company, an affiliate of the National Iranian Oil Company (NIOC). Naftkav has submitted the lowest bid, Pars Oil sources say.

Pars Oil managing director Assadollah Salehiforoz said on 7 November that the rig is expected to start drilling in one month, moving to another location within another three months. One delineation well, 900 metres deep and 800 metres along a horizontal path, has just been drilled by Schlumberger and tests are being carried out to determine flow rates, says Salehiforoz.

The delineation wells, which are in addition to earlier exploration drilling, will allow South Pars to retender the offshore oil field project after a lengthy suspension. Denmark's Maersk Oil & Gas, at the head of a consortium comprising France's TotalFinaElf and the local Petro Pars; Norex of Norway; and Malaysia's Petronas were among firms taking part in a first round of bidding in 1999, but talks ground to a halt because of uncertainty over reserves at the South Pars oil field, which is near the South Pars gas field (MEED 25:8:00).

"The bidders were factoring in a very high risk factor, so we had to establish better parameters," says Salehiforoz.

It is uncertain that any of the first round bidders are still interested. Maersk suggested in April it had lost interest, while Norex said in August it was still interested.

A tender issued in spring 2000 will include facilities for early production of 30,000-50,000 barrels a day (b/d) within one year of start of work, according to Salehiforoz. Output is to reach a peak of 75,000-100,000 b/d.

About 95 million barrels of crude is to be produced over the first five years; water injection will thereafter be required to maintain pressure, Pars Oil sources say.

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