LONDON�Enterprise Oil PLC, through its subsidiary Enterprise Middle East Ltd., has inked a participation agreement with South Pars operator Petro Pars Ltd. giving the UK oil company a 20% stake in Phases 6, 7, and 8 of the giant gas field development project off Iran.
The deal, which is subject to approval of the National Iranian Oil Co. (NIOC), was set up through the assignment of a proportionate interest in a service contract entered into by Petro Pars and NIOC in July this year.
As part of the arrangements, Enterprise will give provide Petro Pars technical assistance and contribute up to $15 million toward the cost of an appraisal program to be carried out next year.
Project costs in the service contract, of which Enterprise will bear its share, include appraisal, offshore, and onshore development costs, and total $2.65 billion over 6 years.
Enterprise planned to "work jointly with Petro Pars in all aspects of the development and take the lead in the offshore part of the project," involvement which will entail drilling some 30 production wells from three new wellhead platform complexes, each with a 32-in. pipeline to an onshore gas processing facility. From there the gas will then moved by pipeline for injection into the Agha Jari oil fields to boost oil production.
Phases 6, 7, and 8 of the South Pars development are expected together produce 3 bcfd of gas, 120,000 b/d of condensate, and 3,300 tonnes/day of liquefied petroleum gas.
Enterprise will claim its revenue share on a buy-back basis under the service contract through the sale of condensate and LPG produced along with the gas. Petro Pars is currently operating Phase 1 of the South Pars development and is also a partner with Italian company ENI SPA in Phases 4 and 5.
Enterprise Chief Executive Pierre Jungels said, "This is our first major involvement in Iran�s oil and gas industry and an important first step in building a profitable business in the country. It also marks the successful implementation of our strategy to focus our new venture activity in proven hydrocarbon provinces."