Tehran, June 29, IRNA-China National Petroleum Corporation started work on the first phase of a project for recovery and extraction of oil from 10 wells in southern Masjid Soleyman oil field based on a buy-back contract signed with Iran.
The project consultant Iraj Rezai told IRNA here on Wednesday that the Chinese party holds 75 percent or dlrs 85 million worth of stakes in the project, while Iran's Naftgaran Company holds 25 percent of shares worth dlrs 15 million in the project. The project was initially granted to Canada's Sheer Energy by National Iranian Oil Company.
Rezai said the project aims to increase the output of the oil wells to 28,000 bpd from their present 5,000 bpd in the first phase. It also seeks production of an additional 10,000 bpd through recovery of another 22 wells and establishment of an oil refinery in Zilaie district in Masjid Soleyman.
He said the project is expected to create jobs for 2,000 people once drilling rigs are installed before start of the second phase of the operation.
The project was initially to be completed and put into operation in June 2006 but it was postponed due to the refusal of the Canadian partner to go ahead with the project.
The buy-back deal for the development project was signed on May 28, 2002, by National Iranian Oil Company and Sheer Energy Inc. of Canada to raise the output of the country's first oil field in Masjid Soleyman discovered nearly 100 years ago.
The agreement to develop the Masjed Soleyman field in southwestern Khuzestan province was signed by Deputy Oil Minister Mohammad Mir-Moezi and the head of the Calgary-based firm Terry Lawrence.
The contract, worth 121.225 million dollars and with a life span of seven years, was the first important deal with a foreign company after another contract was inked with Italy's Eni in July of 2004.
The Masjed Soleyman field was discovered in 1908 and was the first to be exploited in Iran.
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