The Iranian government approved Sheer Energy Cyprus Ltd. to redevelop Masjid-i-Suleiman oil field under a buy-back contract.
Sheer, a unit of Sheer Energy Inc., Calgary, noted MIS field, discovered in 1908, was the first found in the Middle East.
Sheer operates the project with 49% interest. Naftgaran Engineering Services Co., Tehran, a subsidiary of the Oil Industry Investment Co. of Iran, has the rest.
Sheer will invest $88 million (US) over 4 years for a reservoir simulation study, recompletion of four to six wells, drilling of two vertical wells and eight horizontal wells, and construction of processing and water reinjection facilities. The project would produce an incremental 20,000 b/d. National Iranian Oil Co. produces 4,500 bo/d from the field now.
Repayment will be made from oil sales over 3 years. Compensation is based upon an undisclosed rate of return at the targeted production level, which rate will increase or decrease for production above or below the target over the payback period.
MIS is one of several large oil fields producing from Oligocene Asmari fractured carbonates. The field is 30 km long and 7 km wide.
Sheer estimates original oil in place to have been more than 6 billion bbl of 40°-gravity oil, of which 1.2 billion bbl have been produced. The producing horizon has 60-90 m of net oil pay at an average depth of 1,000 m.
