Iran Signs $850 Mln Salman Oil, Gas Deal
October 23, TEHRAN (Reuters) - Iran signed an $850-million deal with
the Iranian company Petro Iran on Monday to boost oil output and begin
natural gas production at the offshore Salman field in the Gulf, state
It said that under the agreement, oil production would be increased
to 130,000 barrels per day (bpd) within three years from the current 85,000
The production of 14 million cubic meters (494 million cu ft) of gas
per day would begin within four years under the "buy-back" deal,
The field, shared with Abu Dhabi of the United Arab Emirates, would
also produce 9,000 bpd of condensates per day.
Iran said in June it had initialed a deal with Petro Iran for the Salman
field, with a final signature expected soon.
It was not immediately clear if the Iranian company would carry out
the contract alone or seek foreign partners.
Under Iran's so-called buy-back formula, an investing company recoups
its capital and makes a profit by receiving part of the project's output.
The Salman project was among $8 billion in oil and gas deals which Iran
said in late August it would soon sign or finalize to add one million bpd
to its daily crude output and 50 percent to natural gas production.
Iran, the second largest producer in the Organisation of the Petroleum
Exporting Countries, seeks to boost its crude output capacity to about
five million bpd by 2005 from about 4.2 million bpd now.
The country, which has the world's second largest gas reserves after
Russia, is also seeking to develop its largely untapped natural gas resources.