TEHRAN, Jan. 23 (Mehr News Agency) -- The Petroiran Development Company (PEDCO) is in talks with Italy's Saipem over two EPCM (Engineering, Procurement, Construction, and Maintenance) contracts for the project to develop the Azadegan Oilfield in southern Iran, the PEDCO managing director said here on Tuesday.
"We are negotiating with the Italian petroleum and gas group Saipem - a subsidiary of Italian energy giant ENI - over two EPCM contracts for conducting engineering studies and purchasing equipment for the Azadegan development project," Mostafa Khoyi told the Iranian Students News Agency (ISNA).
He added that his company is also holding discussions with Iranian companies for the same contracts in order to put the purchase of the required equipment in order.
"The Azadegan drilling deal will be finalized within the next couple of months," the official continued, noting that the grounds are prepared for the participation of foreign companies in the development of Azadegan.
"We have received proposals from Asian and European companies for the project, and negotiations are ongoing with them. Talks are also continuing with Italy's ENI in this regard, however, they are yet to be finalized," Khoyi elaborated.
Petroiran signed a $300 million contract with the National Iranian Drilling Company (NIDC) on drilling operations at the Azadegan field last December.
Under the contract, NIDC will drill a total of 37 wells: two appraisal, one disposal, and 34 development wells. The company plans to start drilling operations in mid 2007 after the implementation of preliminaries and access roads. The NIDC will use four drilling rigs for the operations, which are scheduled to be completed in 40 months.
Located in the southwestern province of Khuzestan, Azadegan is one of the world's largest untapped oilfields. The reserve is estimated at 32 billion barrels in situ.
The National Iranian Oil Company (NIOC) signed a contract worth over $2 billion with Japan's Inpex in February 2004 to develop the Azadegan field. However, delays occurred until last November, in part due to mine-sweeping operations, when a new agreement was inked to reduce Inpex's previous share of 75 percent to 10 percent. Presently, NIOC's marketing subsidiary Naftiran Intertrade Company (NICO) holds a 90 percent share of the project. NICO, for its part, selected PEDCO, another NIOC affiliate, as the sub-contractor for the Azadegan project.
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