Tehran, Jan 9, IRNA - National Iranian Oil Company and Italian power company Edison (EDN.MI: Quote, Profile, Research) on Wednesday signed an agreement for exploration of Iran's offshore Dayyer oil and gas block.
The area is part of 17 offshore and onshore blocks in the Persian Gulf auctioned a few months ago in 2007.
The contract was signed by Director of the NIOC Exploration Manager Mahmoud Mohaddes and Deputy head of Edison SPA CEO Umberto Quadrino, Petero Cavana, in presence of Oil Minister Gholam-Hossein Nozari.
Edison will invest about 30 million euros ($44.10 million) over four years in exploring the 8,600-square-km (3,320-square-mile) area in the Persian Gulf.
Edison said in a statement, if reserves are discovered, it will enter development phase directly.
Under the deal, Iran will in partnership with Edison boost exploration and development activities and identify and assess the hydrocarbon resources quickly. It will also help attract participation and cooperation of the world well-reputed companies in the upstream sector.
The contract obliges Edison to launch feasibility studies for a bi-dimensional seismographic operations and drill an exploratory well. If the studies comes across with evidence that there are hydrocrabon resources in Dayyer oil and gas field, complementary tri-dimensional seismographic operations will be conducted and a second exploratory well will be drilled.
The complementary studies, including the geophisical studies and drilling of the exploratory wills, are expected to cost overal dlrs 107 million. The project will take four years, which would be extended for one more year if necessary.
Dayyer block covers an area of more than 8,500 square kilometers.
The contract commissions the inking parties to use Iranian domestic workforce for effective implementation of the project.
Addressing the contract signing ceremony, Mohaddes said Persian Gulf is an important region for Iran, hoping that the NIOC and Edison will have fruitful cooperation in the fields of oil and gas in the future.
Mohaddes said for exploration and development of Dayyer block four proposals had been offered by four international companies, out of which Edison had been most qualified both financially and technically.
Putting capital turnover of the project at 14 percent, Mohaddes said the contractor will finance operations and bear risks in the exploration stage and if the commercial field is identified, the expenditure will be reimbursed out of revenues gained from the explored field's output.
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