0642 GMT July 24 2017
Japan's Toyo Engineering Corporation on Monday signed an agreement with National Iranian Oil Company and Petropars to develop the offshore Salman oil and gas field in the Persian Gulf, IRNA reported.
The document was signed in Tehran on Monday by Deputy Managing Director of NIOC Gholamreza Manouchehri, Petropars CEO Hamid Akbari and Hiroshi Sato, a senior executive of Toyo.
The agreement is aimed at increasing natural gas production and renovating the field's facilities.
Based on the agreement, Petropars, a subsidiary of NIOC, will finance the feasibility studies of Phase 1 while Toyo will bankroll operational costs of the project's Phase 2.
Salman field is located 142 kilometers south of Lavan Island off Hormozgan Province in the Persian Gulf. It extends to UAE territorial waters and contains several layers of crude oil as well as a gas layer.
Iran is currently pumping 60,000 barrels per day of crude and a little over 2.2 million cubic meters of gas from the field, according to the latest production data.
In comparison, the country draws more than 50 mcm/d of gas from a standard phase of South Pars, the world's largest gas field shared by Iran and Qatar in the Persian Gulf. Salman's recoverable crude oil reserves are estimated at around 500 million barrels.
Established in 1961, Toyo is a Japanese engineering, procurement and construction company operating mainly in oil, gas and petrochemical sectors. Most of the company's operations are based outside Japan, including in China, India, Indonesia, Iran and Russia.
Toyo offers wide-ranging services, including design, engineering, equipment procurement, construction, test operations and technical guidance in the fields of chemicals, petrochemicals, oil refinement, natural gas, electric and nuclear power, medical facilities and biotechnology.
The agreement with Toyo marks the second deal signed by Petropars this month on developing oil and gas fields.
Hailed as the largest Iranian exploration and production company, Petropars signed a deal on July 3 to develop Phase 11 of South Pars Gas Field alongside French energy major Total and China's state-controlled CNPC. Petropars is a minority stakeholder in the gas venture.
The first crude oil production from Salman dates back to over 50 years. Output reached a peak of 234,000 barrels per day during 1973-78 but production gradually declined, as the field continued to age.
However efforts to raise the recovery factor at Salman oil and gas field have largely been futile since early 2000s.
According to an NIOC report, Iran has failed to boost production from the joint reserves due to a mix of factors, including financial constraints, failure of contractors to meet ends as well as sanctions that stripped Iran of cash and know-how to develop the field.
Meanwhile, NISOC and Russia's Zarubezhneft on Monday signed a new MoU for oilfield study in Iran.
According to the agreement, Zarubezhneft company will study two Iranian oilfields of Shadegan and Rag-e Sefid in the southwestern province of Khuzestan.
Based on the agreement, Russia's Zarubezhneft is committed to present its proposal for development of the two Iranian oil fields in a maximum of nine months.
The MoU on the study of Shadegan and Rag-e Sefid oilfields is the eighth agreement signed between National Iranian South Oilfields Company and Russia's Zarubezhneft.
Two other Russian companies of Gazprom and Rosneft have already inked agreement with Iran for oilfield study, but they have not reached a final deal yet.