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Iran Oil Field in Southern Province to Come on Stream

Posted on: Friday, 22 July 2005, 06:00 CDT

Text of report in English by Iranian news agency IRNA web site

Tehran, 21 July: Head of Darkhovein oil field development phase for engineering said here Wednesday [20 July] that the first phase of the field will come on stream with a production of 50,000 barrels per day.

Bahram Kakuleki told reporters that the contract for the development phase was signed between the National Iranian Oil Company (NIOC) and Italian oil concern ENI in July.

"ENI has 60 per cent stake of the deal, with the Iranian firm NICO [ Naft-Iran Intertrade Company] holding the remaining 40 per cent," he added.

He said that the development phase consists of two phases with production capacity of 160,000 barrels per day as the goal. "The project investments have been estimated to be 1.26 bn dollars," the official underlined.

"So far over 23 million barrels of oil has been extracted from the Darkhovein field," he added.

Also, Ali Akbar Vahidi-Ale-Aqa, deputy head of the Engineering and Development Oil Company which is the project lead contractor said the contract has the lowest costs among agreements signed in the oil sector.

The ceiling on rate of return on investments is set at 13.94 per cent for the first phase and 13.92 for the second phase, Vahidi-Ale- Aqa added.

He said that over 59m dollars have been paid out to the contractor for the expense incurred. "Furthermore, the second phase is scheduled to be completed by December 2006 and has had 32.28 per cent progress."

The Darkhovein oil field is situated at 85 kms south of Ahvaz and 35 kms outside Iran's Persian Gulf ports of Abadan and Khorramshahr.

First Vice-President Mohammad-Reza Aref is to inaugurate on 23 July, the first phase of the project. The project, financed out of foreign resources, will generate 500 jobs when fully operational.

The National Iranian Oil Company (NIOC) has no plans to adopt a new format of contracts for the development of Iran's oil fields instead of buybacks, it was reported here in May.

[Passage omitted: background information]

Source: BBC Monitoring Middle East

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