By Staff, Agencies

Iran is finally about to break a 22-year spell on completing the last development phase of South Pars, the world's largest gas field, which French oil and gas major Total quit twice under sanctions.

Total had signed a $4.9 billion deal with the National Iranian Oil Company [NIOC] under the former government to produce 2 billion cubic feet per day or 400,000 barrels of oil equivalent per day including condensate, with output due to start in early 2021.

It and other international firms, however, lost the project to Iranian companies, Minister of Petroleum Javad Owji said during the installation of the first offshore platform for Phase 11 of South Pars in the Gulf last week.

The construction, shipment and installation of the gigantic structure capped a feat of well design; production, reservoir, geological and infrastructure engineering and development of surface facilities, which foreign companies carried out in the past.

It was in 2005 when NIOC signed a memorandum of understanding for the upstream development of Phase 11 and the construction of a 10 million-ton LNG production plant. Petronas later joined the $11.2 billion project in a joint venture, 40 percent held by Total, NIOC with 50 percent and Malaysia’s national oil firm with 10 percent. 

The phase will now start production at 15 million cubic meters per day and reach an ultimate capacity of 56 million cubic meters of gas, 50,000 barrels of gas condensate and 750 tons of sulfur per day when its development is complete.

The construction and installation of the second platform, currently underway, and drilling of new wells at Phase 11 is an important step in Iran’s drive to achieve energy independence and geopolitical stability, which will dramatically increase the gas production capacity at South Pars.

It will meet Iran's domestic consumption needs and help the country emerge as an important regional exporter.

The economic benefits of completing Phase 11 are many. It is estimated to create up to 10,000 jobs and bring $20 billion of income to Iran a year. In addition, it will help revive Iran's oil and gas sector, which has been struggling over the years due to sanctions and low investment.

The project also captures the fruition of the unique efforts of Iranian companies and specialists who set remarkable records and initiatives in various operational processes, such as removal, transfer and installation of platforms, drilling and building pipelines.

The countdown has now begun for the start of gas production from the phase in a ceremony attended by President Ebrahim Raisi in the coming weeks – something Iran’s nuclear agreement with the West and subsequent agreements with international energy companies were not sufficient to fulfill.

“To produce from this phase, we did not wait for the removal of the sanctions and the participation of foreign companies. Now Total and Shell companies are left wondering how we did this within 20 months,” Owji said.

“The Phase 11 development contract with Total and a consortium of foreign companies in the previous government was worth $4.9 billion, but they lost it to Iranian companies because from zero to one hundred of the project was carried out by Iranian experts,” he added.

With Phase 11, the production file from the last phase of South Pars is now closed, but a new chapter has just begun in Iran’s sprawling petroleum industry which does not have to wait for foreign companies anymore to carry out its projects - and that with so many strings attached and sky-high costs.