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EghtesadOnline: The first crude oil consignment from the oil layer of South Pars, the giant gas field that is shared between Iran and Qatar in the Persian Gulf, has been exported, managing director of the Iranian Offshore Oil Company (IOOC) said on Monday.

“The 700,000-barrel cargo from a floating production, storage and offloading (FPSO) vessel (FPSO Cyrus), was shipped last week," Hamid Bovard was quoted as saying by IRNA.

It marks the first time that Iran has drawn and exported crude oil from the shared field.

A FPSO is a ship-shaped vessel, with processing equipment on the deck as well as hydrocarbon storage units. After processing, the offshore facility stores oil or gas before offloading periodically to shuttle tankers or transmitting processed petroleum via pipelines, Financial Tribune reported.

"Several wells were drilled in the oil layer and production started in December," he said, noting that talks are underway with multinationals, especially Austria's OMV, to develop the second phase of the project.

As a first step, Iran aims to stabilize production at 25,000 barrels a day and gradually boost output to 55,000-60,000 bpd.

South Pars oilfield is located in the center of the Persian Gulf, about 130 kilometers off the Iranian coast, and adjacent to Qatar's territorial waters, holding an estimated 7 billion barrels of oil in place. The field is the northeastern extension of Al-Shaheen oilfield in Qatar.

---- Raising Output From Joint Fields

"In line with declared policy to accelerate the development of joint oil and gas fields, production will increase from joint fields in the Persian Gulf, namely Esfandiar, Hengam and Foruzan by 20,000 bpd by June," Bovard said, noting that drawing oil from the seabed reservoirs costs roughly four times that of onshore reserves.

Commenting on the role of the private sector in drilling operations, the official said the sector accounts for 60% of all drilling operations in the Persian Gulf.

According to Bovard, IOOC has implemented $3 billion worth of projects under engineering, procurement, construction and financing (EPCF) contracts in the past few years in collaboration with domestic and foreign firms.

"Aging offshore facilities should be reconditioned," the official said, noting that $3.2 billion in investment is required to drive the rehabilitation plan, which will consequently translate into higher oil revenues.

Asked about the Persian Gulf joint gas fields including Arash, Farzad A and B and Salman, the official noted that an investment package for nine fields, worth $1.8 billion, will be unveiled in the next few days in an effort to raise natural gas production by 8.5 million cubic meters a day from the fields.

According to Karim Zobeydi, deputy for planning affairs at the National Iranian Oil Company, Iran and Kuwait are trying to work out some agreement to develop Arash Gas Field in the Persian Gulf, which has been a subject of dispute between Middle East countries for years.

Arash field, known as Aldorah in Kuwait, lies southwest of Kharg Island. Geographically, the field is shared between Iran and Kuwait, but Saudi Arabia has laid claim to the field in recent years, according to the Oil and Gas Journal.

IOOC South Pars Iran gas Iran oil Hamid Bovard Iran gas field