EghtesadOnline: Attracting much-needed foreign funds and having access to cutting-edge drilling know-how are among the most essential elements to develop untapped hydrocarbon deposits in the Caspian Sea, the construction and engineering manager in Khazar Exploration and Production Company said.
"Tapping into the huge oil and gas deepwater offshore reserves in the region where the country has largely underperformed over the last four decades is high on the agenda," Masoud Matinfard was also quoted as saying by Shana on Tuesday.
Pointing to challenges in undertaking deepwater operations, Matinfard said being deprived of the state-of-the-art technology, in addition to the lack of infrastructure in the north, has strained the company's ability to develop the reserves.
According to the official, international energy majors' unwillingness to play a role in the Caspian Sea is "quite normal", as drilling at a depth of 1,000 meters with oil prices around $50 a barrel is discouraging, Financial Tribune reported.
Matifard noted that at the beginning of the previous decade, when oil prices ranged between $27-40, the South Caspian Study Group conducted a survey, based on which the cost of producing each barrel in the Caspian Sea amounted to $9.8 a barrel.
"Extraction costs have at least doubled compared to the time, while oil prices have only experienced a marginal growth," he said, adding that deepwater drilling is not appealing to oil majors anymore, even in the Gulf of Mexico and Brazil where it was profitable not long ago.
The official believes Iran's new model of oil contracts can play a major role in shoring up foreign investment.
"The more lucrative contracts are signed, the more motivation foreign enterprise will have to complete offshore initiatives," he said.
"Onshore oilfields are usually developed in a seven-year period, while tapping into deepwater reserves will take much longer."
Underscoring the significance of acquiring the know-how for expanding offshore fields, Matinfard said Iranian experts have been working on onshore hydrocarbon reserves for a century, yet there is still a long way to go with regard to deepwater operations.
According to Mohsen Delaviz, KEPCO's managing director, Azerbaijan's oil officials have recently expressed interest in collaborating with KEPCO to develop Sardar-e-Jangal Gas Field in the Caspian Sea off Gilan Province.
"In addition to Azerbaijan, British, Dutch and Norwegian oil majors have also submitted proposals for joint ventures with KEPCO to tap into the rich oil and gas resources of the region," Delaviz said, adding that a decision will be made soon.
"It is likely that the Sardar-e-Jangal field, discovered in 2012, will be developed by Russia's Lukoil under the new Iran Petroleum Contract model."
In late 2015, Iran introduced three exploratory blocks in the Caspian region, known as 24, 26 and 29 as well as Sardar-e-Jangal, as part of its new oil and gas projects to attract foreign investment.
Delaviz said drilling here at a depth of 1,000 meters will not be viable due to its high operational costs, unless foreign companies and private companies step in.
Despite making significant headways in exploiting oil and gas resources in the south, energy developments in Iran's northern regions have made few headlines in the past several years.