Iran’s Petropars Ltd. signed a contract to more than double output at the South Azadegan oil field, the second deal this month to boost production at a deposit shared with Iraq.
Petropars agreed to raise the field’s output to 320,000 barrels a day over 30 months from 140,000 currently. The deal with Petroleum Engineering & Development Co., a unit of state-run National Iranian Oil Co., is valued at $1.26 billion, the companies said at a ceremony on Monday.
Azadegan, split into northern and southern sections, is the largest oil field that Iran shares with a neighboring country. South Azadegan holds an estimated at 1.5 billion barrels of recoverable crude, out of some 2 billion recoverable barrels in the total deposit. The deal also entails production of 200 million cubic feet per day of natural gas.
Iran’s oil output has plummeted by almost half over the past two years to 1.9 million barrels a day due to U.S. economic sanctions, which have discouraged international investors and blocked most of the country’s crude exports. Petropars was left in charge of developing part of the South Pars gas field last year after France’s Total SA and the China National Petroleum Corp. pulled out of the project to avoid running afoul of the sanctions.
Earlier this month, Iran’s Persia Oil & Gas Industry Development Co. signed a $463 million agreement with NIOC to operate and develop the Yaran oil field, which lies like South Azadegan near the Iraq border in southwestern Khuzestan Province.
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