As the crown jewel of Iran’s energy industry, the giant South Pars gas field (which Iran shares with Qatar in the Persian Gulf) has nearly reached its full potential and Iran’s gas production from the field is said to have surpassed that of the rival Qatar.
Platform 13C, the last platform of Iran’s South Pars gas field’s development project, was installed on its designated offshore spot on March 8, bringing Pars Oil and Gas Company, which is in charge of developing the gas field, one step closer to achieving its goal of completing the field’s development project as scheduled.
Iranian Oil Minister Bijan Namdar Zanganeh has previously announced that all of the field’s 24 phases, except for phase 11, were going to be operational by the end of the current Iranian calendar year.
The completion of this gigantic project is a huge achievement for Iran’s oil and gas industry considering the pressures and limitations imposed on the country through the U.S. sanctions. However, what is important now is the maintenance of the production levels and increasing the field’s recovery factor.
Now that the country has reached its peak production levels, it should be taking necessary measures for maintaining the production levels since every year the field’s recovery factor is going to plunge more and more.
SP’s discovery and development
The South Pars gas field (known as North Dome field in the Qatari side) is by far the world's largest natural gas field.
According to the International Energy Agency, the field holds an estimated 1,800 trillion cubic feet (51 trillion cubic meters) of in-situ natural gas and some 50 billion barrels (7.9 billion cubic meters) of natural gas condensates.
This gas field covers an area of 9,700 square kilometers, of which 3,700 square kilometers is in the Iranian waters and 6,000 square kilometers is in the Qatari territorial waters.
South Pars was discovered in 1990 by the National Iranian Oil Company and Pars Oil and Gas Company, a subsidiary of NIOC, which is in charge of the field’s development.
The development of South Pars Field started in 1998 and 29 different phases were defined for the project along with a separate oil block.
Since the beginning, the field’s development project has gone through so many ups and downs and many foreign and domestic companies have contributed to the completion of the field’s various phases.
France’s Total. Italy’s Eni, Malaysia’s Petronas, Russia’s Gazprom, Norway’s Statoil and the China National Petroleum Corporation are some of the foreign companies which have worked on the field for different phases and in different time spans.
Despite all the U.S pressures which led to the departure of almost all of the above-mentioned companies from the project, and despite all the technical and engineering problems faced in the process, Iran has managed to proudly finish the development of almost all the phases of the field and even the field’s oil layer is also producing nearly 50,000 barrels per day of oil.
According to Mohammad Meshkinfam, the managing director of POGC, Iran is currently producing 650 million cubic meters of gas from South Pars while Qatar’s output currently stands at about 570 million cubic meters.
As I mentioned before, now that Iran has achieved its goal of completing almost all of the South Pars gas field’s offshore phases, the next step would be to start planning for maintaining the output levels.
Qatar is using the most up to date technologies to prevent the decrease of the North Dome phases’ recovery factor while in the Iranian side the fall in the factor has already begun and due to the U.S. sanctions Iran does not have access to the technology for installing pressure-boosting platforms as the Qatari side is using them.
Before the reimposition of the U.S. sanctions in 2018, the French giant company Total had signed a deal with the National Iranian Oil Company for transferring the knowledge and developing the phase 11 of the field which required such pressure-boosting platforms, but after the U.S. withdrawal from Iran’s nuclear deal Total was forced to leave the contract and the project remained at the primary stages.
In an interview in August 2019, Meshkinfam had said that the recovery factor of some phases in the field have started to fall but the decrease is not currently significant, however, the official stressed that within the next three or four years if Iran does not come up with a plan for managing the situation, the decrease in the field’s production pressure will be as big as the total capacity of a phase (56 million cubic meters) every year.
So the question is what should Iran do to prevent such a huge loss? Although at the moment we cannot answer this question clearly but there are some options.
According to the POGC head, Iran is already working on a program for designing its own pressure-boosting platforms and Iranian experts and engineers are doing their best to achieve that goal, however, if the program does not achieve the desired goal within the next three to four years, the country should take necessary measures to encourage foreign companies to take the risk and contribute to the project. (March 25, 2020)
IRAN - Natural Gas - Production