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First phase of Iran's Darkhoein oil field to come on stream next week

Tehran, July 21, IRNA-Head of Darkhoein oil field Development Phase for engineering said in Teharn on Wednesday that the first phase of the field will come on stream with a production of 50,000 barrels per day (BPD).

Bahram Kakouleki told reporters that the contract for the development phase was signed between National Iranian Oil Company (NIOC) and Italian oil concern ENI in July. "ENI has 60 percent stake of the deal, with the Iranian firm NIKO holding the remaining 40 percent," he added.

He said that the development phase consists of two phases with production capacity of 160,000 BPD as the goal. "The project investments have been estimated to be dlrs 1.26 billion," the official underlined.

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

Also, Ali Akbar Vahidi-Alagha Deputy Head of 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 percent for the first phase and 13.92 for the second phase, ahidi-Alagha added.

He said that over dlrs 59 million 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 percent progress."

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

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

Local press quoted an NIOC official as saying the company still has underscored the need to increase the contractor reward set by the buybacks to provide more incentives for the companies to take up the projects.

Esmaeil Sorayyaei, the director of NIOC Department of Project Management said the Fourth Five-Year Development Plan (2005-2010) has not specified replacing buybacks with any other format of contracts.

He stressed the NIOC has thus no authorization to take any step in that direction.

Sorayyaei said the plan has defined a certain approach for the development of various oil projects throughout the country and that the NIOC cannot change to other contracts without considering the contents of the Fourth Plan.

The Persian-language newspaper `Hayat-e No' quoted the official as saying that making amendments to the current format of buybacks is constitutional.

However, any effort to change from one format contract to another requires the authorization of Majlis.

He said the NIOC is authorized to apply the finance scheme for projects like increasing the production capacity of the fields, the development of the refineries and the reconstruction of the facilities.

The official further added finance deals are not very different from buybacks and suggested that Iran improve the buybacks to make them more attractive by reducing the costs and increasing the contractor reward.

... Payvand News - 7/21/05 ... --

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