Iran strengthens field development ties with Iraq

Iran says it is increasing exploration and production at joint fields

Mahmoud Ahmadinejad (R) meets with Iraqi Parliament Speaker Osama al-Nujaifi (L) on 2 October 2011. Oil production ties
Mahmoud Ahmadinejad (R) meets with Iraqi Parliament Speaker Osama al-Nujaifi (L) on 2 October 2011. Oil production ties

If recent news reports are accurate, Iran and Iraq are working more closely than ever in producing oil assets shared across the borders between the two former enemies.

According to Iranian media citing Iran’s National Oil Company chief Ahmad Qalebani, Iran will begin to produce crude from the Yadavaran oilfield, which is associated with Iraq, by 20 March.

The oilfield, which Iran holds the right to develop under a contract signed in 2007, has an upper estimate of around 12 billion barrels of in-situ crude, 12.5 trillion cubic feet of associated gas, and nearly 1.9 billion barrels of condensate, according to Iran’s ISNA news agency.

Iran’s Petroleum Engineering and Development Co (PEDC), a state oil company, has signed a $200 million contract to jointly develop the 3.4 billion Changooleh oilfield with Iraq, according to the Trend and ISNA news agencies. After initial production of 15,000 bpd PECD hopes to boost output 65,000 bpd in the future, Fars news agency reported.

On 16 January Tehran and Baghdad have decided to establish a joint company to developing three joint further oil fields, according to an announcement by Mehdi Fakour, Managing Director of the Iranian Central Oil Fields Company (ICOFC).

Iran produces some 68,000 barrels per day of crude oil in four currently producing oilfields associated with Iraq (Naftshahr, Paydar Gharb, Dehloran and Aban), and the Oil Ministry has made developing jointly-held oilfields a priority, occasionally to the chagrin of its neighbours. Iran says it has eight active drilling rigs in Iraq alone.

In early January Kuwait censured Tehran’s diplomat in Kuwait over an announcement from the managing director of National Iranian Continental Shelf Oil Company (NICSOC) that Iran would produce oil at the continental shelf, the exploration and production rights to which are deemed to be held jointly, in a unilateral manner unless a relevant agreement was reached with Kuwait.

The countries have also co-operated on gas supply, with an export pipeline from Iran to Baghdad reported to be 40% complete, according to Iranian Oil Minister Roastam Qasemi.


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