ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), has signed a pact with Iran's IDRO Oil to jointly bid for a USD 1 billion contract for development of Susangerd oilfield in southern Iran.
The onland Susangerd field in the Khuzestan province is one of the newest finds, which Iran hopes will produce around 30,000 barrels per day of oil in two development phases.
OVL signed a Memorandum of Understanding (MoU) to collaborate with IDRO Oil, which is a subsidiary of state-run Iranian Development and Renovation Organisation, in developing Susangerd field, official sources said.
IDRO Oil had last month signed a similar pact with Russia's Zarubezhneft to jointly bid for a contract to develop the Susangerd field.
The Iranian firm is looking at forming a consortium to make a case with the state-owned National Iranian Oil Co (NIOC) for a contract for Susangerd, according to an Islamic Republic News Agency (IRNA) report citing IDRO CEO Nasrollah Zarei.
IDRO Oil is one of 17 eligible contractors that have received the Iranian oil ministry's nod to be a lead partner in joint ventures with international to work in the country's energy sector.
In May last year, it signed an agreement with NIOC, which is the owner of all oil and gas in Iran, to study three fields including Susangerd. In December, IDRO Oil signed up Austrian consulting company HOT Engineering to prepare a master development plan for Susangerd. HOT Engineering Company will provide consultancy services, technical support and a master development plan.
Another Iranian contractor, Pasargad Energy, has also studied Susangerd.
Zarei expected USD 900 million would be required for the development of the oilfield.
Susangerd, located 45-kilometres west of the city of Ahvaz i Khuzestan, is estimated to hold more than 5 billion barrels of in-place oil reserves discovered in 2009. Of these, 500 million barrels are recoverable.
Separately, OVL is also bidding for development rights of Iran's giant South Azadegan Oilfield in direct competition with the likes of global giants like Shell, France's Total, Petronas of Malaysia and Russia's Gazprom.
It is also reworking a USD 6.2 billion cost it had estimated for developing the Farzad-B gas field in the Persian Gulf. OVL is doing recalculations to win rights to development the field it had discovered a decade back.
OVL is one of the 34 companies Iran pre-qualified last year for development of South Azadegan field, which contains an estimated 33 billion barrels of oil in place, of which 6 billion barrels are deemed recoverable. The field currently produces about 80,000 barrels of oil per day (4 million tonnes per annum) and output is envisaged to touch 320,000 barrels a day (16 million tonnes).
Farzad B was discovered by OVL in the Farsi block about 10 years ago. The field in the Farsi block has an in-place gas reserve of 21.7 trillion cubic feet, of which 12.5 tcf are recoverable.
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