Azadegan Oil Field

The Azadegan oil field project involves the development of the North Azadegan and South Azadegan oil fields.

China National Petroleum Corporation (CNPC) is developing the North Azadegan oil field, while the National Iranian Oil Company (NIOC) is developing South Azadegan.

The field was discovered in 1997, at which time it was the biggest oil discovery in Iran in 30 years.

Azadegan is estimated to contain 26 billion barrels of proven crude oil reserves. Production from the field totalled 0.2 million barrels per day (Mbbl/d) in 2017, while plateau production is estimated to reach 0.75Mbbl/d after 2020.

NIOC and Total signed a memorandum of understanding (MoU) in January 2016 to assess the development potential of South Azadegan and other fields in Iran. Total conducted technical studies related to the integrated Azadegan oil field until March 2018.

In December 2019, the University of Tehran outlined strategies aimed at delivering a 10% increase in the Azadegan field’s recovery factor. The University was engaged by NIOC to conduct studies on the field.

Azadegan oil field location

Azadegan oil field covers an area of 39km² along the Iran-Iraq border.

The northern field is situated 120km west of the city of Ahvaz, Hoveyzeh, Khuzestan province, spread across 460km². The field is shared with the Majnoun oil field in Basra, Iraq, owned by Shell.

The southern field is situated 100km from the city of Abadan and 80km west of Ahvaz.

South Azadegan oil field development details

The South Azadegan oil field is being developed in two phases to achieve daily production of 600,000 barrels of crude oil, including 320,000 barrels in phase one and 280,000 barrels in phase two.

The field has estimated oil-in-place of 33 billion barrels, of which 1.7 billion barrels are recoverable.

South Azadegan currently comprises six exploration wells and 21 production wells. Its production reached 100,000bbl/d by the end of 2017. NIOC intends to drill 175 new production wells in phase one.

Phase one, which is currently under construction, will also include the installation of ten manifolds, which will carry oil and gas through northern gas and oil separation plant (GOSP) and southern GOSP. Both the GOSPs will include infrastructure for separation, heating, desalting, export pumps and metering, gas dehydration, and compression.

The separated oil will be transported to West Karun Booster via a 60km pipeline. From there, it will be sent to ports for export. Gas is carried to the NGL 3200 processing plant in the Khuzestan province.

The estimated investment in the South Azadegan field development is $5.5 billion.

NIOC and INPEX teamed up in 2004 to undertake the development of South Azadegan. INPEX, however, exited the project completely in October 2010. NIOC entered a $2.5 billion buyback agreement with a subsidiary of CNPC in 2009, but the agreement was later scrapped due to non-fulfilment of deal terms.

Following CNPC’s exit, the Iranian company awarded the development work to 30 local contractors.

North Azadegan oil field development details

The North Azadegan oil field is also being developed in two phases,  targeting a daily production of 75,000 barrels of crude oil and 39.08 million cubic feet of gas in the first phase. The second phase is intended to double the daily production of crude oil and gas.

The field is currently producing 75,000bbl/d of crude oil and is estimated to contain roughly 6.5 billion barrels of crude oil in place.

It comprises a central processing plant, an oil field gathering pipeline network, seven oil gathering stations and 21 well fields. Additional infrastructure built as part of the project includes a 50MW dual-fuel generating station and power transmission and distribution system, a 16in-diameter and 80km-long pipeline to transport oil, and a 12in-diameter, 45km-long pipeline to carry natural gas.

In November 2019, Petroleum Engineering and Development Company (PEDEC) announced that five new development wells and an appraisal well would be drilled to maintain the production level at the field.

The first phase of the project was successfully completed in November 2016.

Contractors involved

The main contractors for the South Azadegan oil field development include the National Iranian Drilling Company (NIDC), PEDEC, the National Iranian South Oilfields Company (NISOC), Technique Company, Tirazh Construction Company, PEDEX, Exploration Operation, Navdisrah Company, Construction, Consulting and Engineering, and Tehran Energy Consultants.

Petrosaz was awarded an engineering and procurement contract. Arvandan Oil and Gas Company undertook operation and maintenance of the surface production facilities of the North Azadegan oil field.

In November 2018, PEDEC transferred the management contract of the South Azadegan oil field to Petropars.

Pars Consulting Engineers Group is responsible for contract management and site supervision.