Development Plan of South Azadegan Oilfields

Objectives

-        Developing the southern part of Azadegan oilfield in two phases;

-        Production of some 320 thousand barrels a day of crude oil and 250 million cubic feet a day of gas in the first phase

-        Daily production of 600 thousand barrels of crude oil and 450 million cubic feet of gas in the second phase

Period of field development

Phase1: 56 months after the contract is applicable (November 1, 2010)

Phase2: 35 months after the first phase is operated

Location

The field is located 120km from Ahvaz by the side of Iran-Iraq border

Major Contractors

-        Buy-back: CNPCI from China with 70% share and NICO with 30% participate in the project. CNPCI is considered the executive operator.

-        Local Sources (contractors):

-        Rampko: Pump house

-        Takvin Sanat and Maroun Karan: 32 and 36-inch pipelines

-        Ahvaz pipe-manufacturing plant: pipe manufacturing

-        Sadid Ertebat and Communication Consultant: integrated Telecom system and video control advisor

-        Zolal, Farpak, Pars Juyab Consultant and Gamron Sanat: integrated system of water infrastructure

-        Technique and Faraj Rah Shadegan: road building and logistics required for oilfields

-        Cheshmeh Khosh and Ala Dasht Azadegan: Green Space

-        Pars Consultant: pipeline

-        Haraz Rah and Ettehad Rah Consultants: Road and Cellar designing

-        Pandam Consultant: Environmental advisor

-        Omid Jonob, Maroun Dej and Maroun Bana: construction of Canals

-        Omid Jonob Khoramshar: construction of a Technical School

-        Pars and Petro Pars Zagros  Participation: MC

Executive Activities:

MDP revision, aimed at fostering production rate up to 320 thousand barrels a day of oil in the first phase is being prepared and finalized. According to the primary MDP (Master Development Plan) all underway activities in the first phase are as follows:

-        Reservoir engineering studies review, considering 3D seismic operations data obtained from drilling operations of 5 delineation wells

-        Drilling and completion of some 165 new production wells

-        Drilling of two disposal wells

-        Construction of a production unit including oil and gas separator unit, desalination and sweetening unit and oil processing unit with the capacity of 350 thousand barrels a day

-        Installation of Artificial Lift System for Sarvak wells, treatment facilities and gas compressor stations

-        Construction of oil transmission pipelines to transfer oil to Karoun West Oil gas compressor station and LPG 3200 plant

-        Construction of some 10 gathering manifolds, two centers for first stage separation

-        Construction of flow and oil transmission pipelines to the production unit

-        Construction of power generation facilities together with water transmission and treatment facilities

-        Conducting preliminary studies related to the activities of the second phase

-        Exploring ways to boost recovery rate from the field

-        Construction of office buildings and recreation camps

All executive activities related to the second phase will be determined after obtaining MDP results

It is necessary to mention, regarding the importance of the field and in order to provide appropriate infrastructure for Azadegan, Yadavaran, Jofeir and North Azadegan fields’ development, the following fundamental activities in the form of internal sources within NIOC (National Iranian Oil Company) are in the pipeline:

-        Construction of pump houses and water supply to the fields

-        Construction of telecom systems

-        Construction of a power plant with the capacity of 320MW as well as transmission lines

-        Construction of 650-km-long access roads

-        Construction of 32 and 36-inch pipelinesfor crude oil transfer from Ahvaz to Bahregan and Ahvaz and Omidieh pump houses

-        Land clearing operations

-        Construction of Technical School

-         Construction of an indoor hall as well as two High schools and one multipurpose hall

-        Completion of Sosangerd 128-bed hospital

-        Implementation of the integrated study of Arvandan oil and gas transmission pipelines

-        Preliminary studies on the region

-        Tree planting covering an area of 900 hectares, and creating green space and stabilizing sand dunes

-        Environmental studies together with monitoring and measuring factors

-        Land procurement in the region

Key Schedule

-        Confirmation date of contract: March 2004

-        Date of terminating phase 1: mid 2013

-        Road construction forecast (phase1&2): March 2009

-        Date of starting the activities related to local sources: December  2003