ONGC finds heavy oil in Persian Gulf

April 21, 2009
India's ONGC Videsh has discovered a large oil field in the Persian Gulf, according to Iranian Offshore Oil Co (IOOC).

Offshore staff

TEHRAN --India's ONGC Videsh has discovered a large oil field in the Persian Gulf, according to Iranian Offshore Oil Co (IOOC). The Binaloud field, in the Farsi block, could hold reserves of 1 Bbbl of heavy crude, an official said - IOOC expects to issue a more precise picture of recoverable reserves in due course.

Mahmoud Zirakchianzadeh, head of IOOC, also claimed that ONGC had agreed to invest $3 billion in a first-phase development of the offshore Farzad B gas field, with the aim of extracting 1.1 bcf of natural gas. This would be converted into LNG for export to India and other countries, including Kuwait.

INGC and refining specialist India Oil Corp. each hold 40% interests in the Farsi block, which has an estimated 12.8 tcf of recoverable gas. The remaining 20% is held by Oil India. Iran has not yet developed capacity for LNG exports, but claims it will be able to produce 77 million tons/year (69.85 million metric tons/year) by 2014.

Earlier this month Zirakchianzadeh said a European company had agreed to commit around $4 billion to develop Lavan, another gas field discovered six years ago in the Persian Gulf with estimated in-place reserves of around 12 tcf. This project, he claimed, would provide annual LNG production of 4 million tons/year (3.63 million metric tons/year).

Two other European oil companies, Royal Dutch Shell and Repsol, have been given a 45-day deadline to re-affirm their commitments to the South Pars 13 and 14 projects. Both companies signed a $10 million development agreement in 2007, but National Iranian Oil Company says that neither has fulfilled its undertakings according to the terms of the accord.

"We told them if they did not come to a conclusion and announce their decision before the specified deadline, we will go on with other applicants," said NIOC's managing director Seifollah Jashnaz.

Seifollah pointed out that Iran had terminated another agreement with Japan's Inpex for delaying work on the giant onshore oilfield Azadegan. Despite US sanctions, Iran claims it is managing to find partners in China and other Asian and European countries for gas projects. Among these are a $14 billion deal signed last December with Malaysia's SKS Group to build an LPG plant, and a $147 million contract last month with Germany's Prematechnik Gastec to provide equipment for three gas conversion facilities.