Elf Petroleum Iran and Agip Dorood BV have signed a 10-year, $540 million buy-back contract with National Iranian Oil Co. (NIOC) for redevelopment of giant Dorood field.
The field is mostly off Kharg Island, although a portion of it is onshore. Elf is operator and holds a 55% interest, with Agip holding the remaining 45%.
The Elf-Agip combine will be repaid for their investment with a share of production.
It is hoped that the use of affiliates of Elf Aquitaine and Agip SpA will further ward off U.S. sanctions against the French and Italian majors, even though the U.S. has so far been disinclined to apply such sanctions-allowed under the Iran-Libya Sanctions Act-against EU companies.
Redevelopment work is expected to boost reserves to 1.5 billion bbl from 600 million bbl. Elf and Agip will use water and gas injection, plus additional drilling, to increase Dorood production from the current 145,000 b/d to 220,000 b/d by 2003.
Elf and Agip will confirm a guaranteed production capacity after 2001, when the first production plateau is reached. Total cost of the project is estimated to be almost $1 billion, including the $540 contract value.
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