Tehran, Dec 28, IRNA-National Iranian Oil Company (NIOC) and British Petroleum are participating in joint gas exploration in RUHM gas field 240 kms northeast of Aberdin in Scotland.
There has been no word on the joint project and after the BP announced the news, Deputy Oil Minister in International Affairs Hadi Nejad-Hosseinian also officially confirmed the agreement.
The project goes back to the early 1970s. RUHM gas field was discovered in 1973 and was confirmed in 1977.
In the same year the officials of the deposed Shah's regime and the British partners established the 'Iranian Oil Cooperation UK limited.' The agreement stipulated for Iran and BP to 50-50 rights to be purchased from British government in exploration of the gas field.
The RUHM is the largest undeveloped field in the north sea primary due to problems related to the pressure of 12,700 PCI, depth of 109 meters, and a temperature of 150 degree centigrade.
Due to these complication the field was abandoned from 1977 to 2000, but with growing demand for gas BP resumed analysis of the development of the field.
BP dug the first well in the field and after announcing the result to the NIOC, Iranian oil officials commissioned studies to revive the project.
Initially the NIOC officials were reluctant to commit to the presence of Iran in the project due to low natural gas prices at the time- 1,000,000 BTU @ dlrs 3 - and favored selling Iran's share of the project.
But, after further study indicated a growing future market for gas prices in Britain, the then managing director of NIOC went to London in 2002 and signed a development agreement with the BP.
After three years the field is now ready for exploration at a cost of 350 million pounds dolled out jointly by NIOC and BP.
The field's proven gas reserves are 1,100,000 billion cubic feet of which 800 billion cubic feet can be exploited.
The oil experts reckoned that the value of the field given the dlrs 13-14 per one million BTU in the British market at dlrs amounts to about dlrs 11.7 billion.
The current daily production is 130 million cubic feet which is forecasted to increase to 300 million cubic feet by late 2006.
Furthermore, the return of investment is estimated at one year at the current prices and production levels.
The gas prices have widely fluctuated in Britain this year and have been as high as dlrs 30 for one million BTU.
The field which was registered as an asset for NIOC International now part of the NIKO company in London affiliated to NIOC.
BP officials have said the company is currently pursuing businesses in Iran in the area of lubricants, chemicals, and trading and insisted it will continue its presence in Iran through its main representative office and at the right time will consider business in the hydrocarbon sector.
The two British companies, British Gas and Shell, are involved in Iran's oil, gas, and petrochemical projects.
BP is also in partnership with Iranian companies for producing engine oil and is among Iran's main oil importers.
A stir was created when Chairman of BP's Board of Directors John Brown said last year in an interview with a British news network, "Due to sanctions imposed by the US and in order to avoid probable punishment, the company has no plans to operate in Iran and is to become active in oilfields in Iraq instead."
Former Iran's Oil Minister Bijan Namdar Zanganeh responded at that time by saying the company has no share in Iran's projects.
"We have offered no projects to BP and remarks by the company's management to the effect that they will not invest in Iran are only a green light to the United States," he said.
Later, British Petroleum officials withdrew their stance. The company is now also extensively involved in Iran's chemical and commercial schemes.
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