Azar Oil Field to Start Production at Full Capacity

Source: 2/22/2020, Location: Asia

The Azar oil field, which Iran shares with neighboring Iraq, is one of the most challenging hydrocarbon fields in terms of drilling. It is currently in the final stages of development. Iranian contractors have managed to develop this field without any help from foreign companies. Keivan Yarahmadi, Azar development manager, tells “Iran Petroleum” the oil processing unit of this field would soon come online and oil extracted from Azar will enter the central processing facility (CPF). Early production from this field began in early 2017 and accumulated output from this field currently stands at 26 million barrels. Yarahmadi said: “As remaining activities become complete, the production capacity of this field will soon reach 65,000 b/d.” Yarahmadi’s remarks are as follows:

Azar’s oil has an API gravity of 32-34. The field’s recovery rate stands currently at 16%. Shared with Iraq, Azar is estimated to hold 4 billion barrels of oil in place. As part of the Anaran block, the Azar field lies along Iran-Iraq border,more specifically between the border cities of Mehran and Dehloran.Under the terms of agreement for Azar, 19 oil fields would be drilled for an output of 65,000 b/d. The drilling of the 19th well is nearing its end. Early production from this field began in March 2017 and reached 30,000 b/d. So far, for processing the Azar oil field, the idle capacity of the operation unit of the Dehloran field has been used.

We are currently focused on pre-commissioning and commissioning of various stages of CPF with a capacity of processing 71,500 b/d. According to plans, before the end of the current calendar year, the mechanical completion and installation of oil trains and utilities of CPF will be complete. Subsequent to the end of commissioning operations, CPF will be ready to come online. Then oil will be injected into Azar’s oil processing facility to turn on the flare. The Azar field’s production capacity will reach 65,000 b/d by then. Therefore, by the beginning of next calendar year, oil production capacity of this field will reach its maximum.

To start the second phase of development of the Azar field, we will see a 30,000 to 35,000 increase in the oil output (totally 97,000 b/d), for which we would need to finalize contract talks with OIEC that has presented its initial technical proposal. According to the master development plan defined for this field, the field will see its total production reach 250 million barrels over 15 years, which would grow to 400 million barrels over 40 years with a recovery rate of 16%.

In the Azar field, we have hired Iranian contractors in designing,implementation and development. I could definitely say that we have top contractors for Front End Engineering and Design (FEED). It has to be also noted that Iranian contractors had some weaknesses during the implementation of the projects, but owing to partnership with foreign companies they gained good experience and managed to use those experiences in the implementation of future petroleum industry projects. We managed to develop one of the most sophisticated oil fields in the world despite all restrictions in our country. That increases the self- confidence of Iranian companies. Azar’s combined output has now reached 26 million barrels and that has encouraged contractors to work more strongly in developing Phase 2 of Azar and also the Changouleh oil field. Iranian contractors have overcome challenges like the Azar field; therefore, they can handle larger fields even outside Iran. That is the objective Mr. Zangeneh was seeking in empowering Iranian companies. Nonetheless, Iranian companies have yet to benefit from the experience of top technological firms and gain more experience alongside them in order to be able to implement complicated oil projects more effectively and efficiently.

First Acid Fracturing in Iran

We knew from the very beginning that boosting the productivity rate of wells, preventing quick fall and guaranteeing sustained recovery from the Azar field, we had to apply acid fracturing that is effectively used in improved oil recovery (IOR) from oil and gas fields. Primary studies and acid fracturing in the Azar field’s exploration well was conducted in 2005 by a leading international company, and subsequently an MDP was defined for this field. But due to the absence of international oil companies in the development of the Azar field, the buyback contractor used domestic companies and benefited from the technical knowhow of some foreign partners to carry out this operation in three wells of the Azar field for the first time in the country. However, due to some logistic and technical restrictions, the operation was halted and acid stimulation was done so that in the future when conditions would be conductive this method would be used again in the wells.

Iranian companies have been successful in developing the Azar field. Despite restrictions emanated from international conditions, the Azar development lingered on; nevertheless, our companies gained much more experience. Due to their experience in developing the Azar field, they can work not only in the Iran market, but also in regional markets. I am still sure that if we had implemented in an atmosphere free of tensions and threat of sanctions, we would have set more records in the Azar field. We have to accept the realities on the ground.

Sanctions have put a strain on the petroleum industry, but that would not mean we can behave inactively in our talks. I remember well when we were in talks with leading international companies in the oil sector; we were on equal footing with them. It is noteworthy that contract talks in developing fields must be win-win. To develop the Azar field, we needed financial resources and sophisticated technology for drilling operations, as well as acid fracturing.

But that would not allow foreign companies to impose their wills upon us. We take part in the negotiations with full knowledge, and God willing as soon as current restrictions have been lifted we will see more prosperity in this sector and we will try more to safeguard national interests.

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