Iran awards $1.2bn worth of new EOR contracts to domestic companies
The Iranian Oil Ministry has signed a third batch of contracts with domestic companies to increase the amount of oil produced from the existing oilfields.
Oil Minister Bijan Namdar Zanganeh was in attendance in a Monday ceremony where officials signed $1.2 worth of enhanced oil recovery (EOR) contracts for a total of eight onshore and offshore projects.
Zanganeh said the deals would enable Iran to increase its crude output from the current oilfields by nearly 100,000 barrels per day (bpd), adding that less than a single year of additional output would mean a full return of investment for the eight EOR projects.
“This figure reaches 36 million bpd in a year which given the price of $40 for (each barrel) of oil, it would generate an annual revenue of 1.5 billion,” said Zanganeh.
Iran began awarding EOR contracts to domestic companies in October 2018 just before the United States started importing sanctions on the country’s trade of crude.
A total of 31 such contracts have been awarded on three occasions with the government committing to $3.7 billion in new investment. Two more EOR contracts would be signed in the near future to bring the amount of government investment in the scheme to $6.2 billion, according to the Oil Ministry’s news service Shana.
Zanganeh said EOR contractors would be compensated from 50 percent of the new crude recovered from the oilfields, adding that the requirement ensures that increased production would be materialized in the oilfields.
Iranian government authorities often say that oil output in the country should reach a target of 8.5 million bpd in the upcoming years despite a reduction in normal exports in recent years that have come due to the American sanctions.
Zanganeh and other government officials have suggested that Iran would be able to swiftly increase its crude exports to levels above 3 million bpd if a future administration in the US decides to lift the oil sanctions.
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