LOS ANGELES, Dec. 18 -- China Petroleum & Chemical Corp. (Sinopec) and Iran have signed an agreement to jointly develop Yadavaran oil field in Khuzestan, Iran, according to Iranian Republic News Agency and Chinese media reports. The agreement finalizes a memorandum of understanding the parties signed in October 2004 (OGJ, Apr. 23, 2007, p. 20; OGJ Online, Nov. 27, 2006).
"The initial estimation of the project's cost is about $2 billion," said Iranian Oil Minister Gholam Hossein Nozari, in a report in the New China News Agency. He said, "Implementation of the contract will start immediately." Production from the field is expected to begin in 2009.
Under the agreement, Sinopec will develop the oilfield in two phases. Phase 1 production will reach 85,000 b/d in 4 years, while Phase 2 will see an additional 100,000 b/d added after 3 years, Nozari said. He said Sinopec is obliged to give 51% of its subcontracts to Iranian companies.
Yadavaran field has a potential output of 300,000 b/d of crude oil. Reserves are estimated at 3-18 billion bbl of oil and 80 billion cu m of gas. China has agreed to buy 10 million tonnes/year of LNG from Iran for 25 years.
Yadavaran is made up of two fields, Koushk (discovered in 2000) and Hosseinieh (discovered in 2002) that were found to be connected and renamed Yadavaran.
On Jan. 7, 2004 Iran negotiated a $40 billion deal giving Indian firm ONGC Videsh Ltd. a 20% stake in the field, while India agreed to buy 7.5 million tonnes/year of LNG from Iran for 25 years. The remaining 29% of the oil field is owned by National Iranian Oil Co.
Contact Eric Watkins at email@example.com.