By the OGJ Online Staff
HOUSTON, Feb. 12 -- Iran has granted approval for Sheer Energy Cyprus Ltd. to redevelop Masjed-I-Suleyman oil field under a buy-back contract.
Sheer, a wholly owned subsidiary of Canadian company Sheer Energy Inc., said MIS field, discovered in 1908, was the first found in the Middle East.
It said, "The company believes that this is an exciting opportunity to apply modern practices and technologies to achieve enhanced recoveries from a very substantial reservoir .Success in the project will have significant implications for a number of other similar reservoirs in Iran and will create job opportunities for the people living in the MIS area."
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 processing and water reinjection facilities. The project would produce 20,000 b/d. National Iranian Oil Co. is producing 4,500 b/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 Asmari fractured carbonates. The field is 30 km long and 7 km wide.
Sheer estimates original oil in place at more than 6 billion bbl of 40°-gravity oil, of which 1.2 billion bbl have been produced. Average depth to the producing horizon is 1,000 m with net oil pay thickness of 60-90 m.