French oil company Total has recently signed a new 20 year investment deal with Iran. This landmark agreement is destined to greatly assist the Arabian country in the development of the gigantic South Pars gas field which it shares with Qatar. Total is scheduled to work hand in hand with Chinese oil firm CNPC and Iranian oil firm Petropars. This new deal follows the French global oil giant’s successful development of phase 2 and phase 3 of South Pars that were completed some time ago in the 2000’s. Total will now run the new project with a stake of 50.1%. While the Chinese CNPC will have a stake of 30% and the Iranian Petropars a stake of 19.9%.
Onshore treatment Facilities
The 1st phase of this new South pars gas field development is slated to cover the construction of 30 wells as well as 2 platforms. All of which will in the long run be linked to the country’s preexisting onshore treatment facilities via 2 pipelines. This initial phase will be completed to the tune of $2 billion, and the whole project will cost approximately $4.8 billion.
The Iranian ministry of energy has stated that the project, upon successful complexion, will enable the country to produce $54 billion in gas products. The gas will begin to flow into the Iranian national market from the year 2021. In essence, the Iranian part of South Pars gas field is destined to boast of a maximum production capacity of 2 billion cubic-feet per day. According to Total, this can be equated to 400,000 barrels of equivalent oil, not excluding condensate.
French commitment in Iran
The French global oil giant’s investment has marked the very first commitment from the west to the Iranian oil and gas industry, since the lifting of international sanctions at the beginning of 2016. The United States along with other global powers decided to ease the sanctions after Iran agreed to roll back its nuclear program.
Just a short while since then, the Arabian country has been able to significantly boost its oil production by more than 33% from 2015, according to reports from OPEC. Iran’s short term objective, at the moment, is to be able to produce a maximum of 4 million barrels of oil on a day to day basis. If this can be achieved, it will effortlessly position the country as one of the biggest and influential global players in this given industry.
The potential of Iran’s oil and natural gas production capacity is widely noted to be very great. The country is believed to accounts for around 9% of the earth’s proven oil reserves, all by itself. While, at the same time, being able to boast of around a fifth or 18% of the world’s total natural gas reserves. These given statistics have been put forward by BP’s statistical review of the planet’s energy.
However, the United States is yet to lift some restrictions, which hinder its own companies from making substantial investment in the Arabian nation. There are as well other firms from other western nations that are still hesitant to do business with Iran. The main reason behind this reluctance is there happen to be some sanctions which are still in place that prevent them from transacting with the Arabian country in US dollars.
By Melanie S. NGM Investment