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EghtesadOnline: National Iranian Oil Company shipped its first crude cargo from West Karoun Oil Block in the southern Khuzestan Province to Spain’s Repsol, an integrated global energy company based in Madrid.

According to Shana, the Iranian Oil Ministry's news portal, the first sale of West Karoun oil, marketed as Pars oil, signifies Tehran’s willingness not only to raise oil exports but also to expand trade with Europeans despite the looming threat of US sanctions

US President Donald Trump last month pulled out of the 2015 accord between Iran and world powers, which lifted sanctions on Tehran in 2016 in exchange for curbs on its nuclear program.

Repsol has ordered 500,000 barrels of Pars oil on a spot basis. The cargo, co-loaded with Iranian heavy grade, is scheduled to be lifted next week, Financial Tribune reported.

The news portal noted that Iran’s oil exports hit a new record in May. NIOC exported 2.4 million barrels of oil per day on top of 300,000 bpd of condensates, an ultra light grade of oil extracted from the giant South Pars Gas Field in the Persian Gulf.

"Other customers might be on board," Shana added, noting that NIOC has distributed samples of the heavy oil from oilfields in southwest Iran to some customers.

Iran is eager to keep customers around the world, because of which NIOC sold its first oil cargo to Chile last week after 16 years.

 

---- West Karoun Revenues

Iran has earned at least $5 billion in revenues annually from the West Karoun block, which is shared with Iraq, in the past two years, the managing director of NIOC said.

“West Karoun’s collective oil output stood at 70,000 barrels per day once President Hassan Rouhani’s government started working in mid-2013, which is now at more than 300,000 bpd,” Ali Kardor was also quoted as saying by Shana.

"To increase the block’s crude production, Iran faced several barriers, most of which stemmed from the period of international sanctions against the country before reaching a nuclear accord with world powers in late 2015."

Kardor noted that officials at the time of sanctions had to take measures to grapple with those challenges and they should not be blamed for all of the faults.

"At the time, the main policy was to move toward sealing buyback contracts, which were not implemented. Thus, they decided to carry out projects based on engineering, procurement and construction contracts, which were finally implemented in separate subprojects," he said.

In February, Noureddine Shahnazi-Zadeh, the chief executive officer of Iran’s Petroleum Engineering and Development Company, told ISNA that collective oil output from West Karoun, which is shared with Iraq, is slated to reach 1.2 million barrels per day.

Referring to plans to develop the pumping station in West Karoun, the official said the station’s capacity will also be increased to 1.2 million barrels per day from the current 750,000 bpd. The official did not specify a timeframe.

West Karoun is the name of an oil-rich region in the southern Khuzestan Province that includes several large oilfields, including Azadegan, Yaran and Yadavaran, with the first two divided into north and south projects.

The block holds an estimated 67 billion barrels of oil in place.

According to published reports, Iran is currently drawing crude from the block at an unacceptable extraction rate of 5-6%. 

In an effort to ramp up the rate of recovery, Tehran is planning international tenders for West Karoun oilfields that could attract major oil and gas companies such as Royal Dutch Shell, Total, Eni and CNPC.

Shahnazi-Zadeh also told energy market data provider, Oil and Gas Year, that Iran has outpaced Iraq's crude extraction rate from West Karoun.

"Iraq is extracting 320,000 barrels per day from West Karoun oilfields, whereas Iran's output has exceeded 350,000 bpd," he said. 

 

Repsol West Karoun Oil Cargo