NIOC Extends Hydro’s Azar Deadline
The National Iranian Oil Company (NIOC) announced on 15 April that it had extend by two months the deadline for Norsk Hydro to submit its master development plan for the Azar discovery on the Anaran block. NIOC’s PIN news service quoted Mehdi Bazargan, Managing Director of NIOC’s Oil Engineering and Development Company (OEDC) subsidiary, as saying that Hydro was expected to submit the development plan by the end of March, an act which would effectively commit the company to the development program. He added that, while the contractor reserved the right to ask for a two-month extension, negotiations between NIOC/OEDC and Hydro were going well and he hoped talks would be finalized in the near future.
Hydro submitted a commerciality report for Azar to NIOC in December 2005, after tests suggested the discovery had the potential to produce 100,000 b/d and estimated oil-in-place at more than 1bn barrels (MEES, 5 September 2005). Subsequently, Hydro made the Shangule West oil find on the same block, which was said to be about the same size as Azar. MEES understands that the carbonate formations in which the discoveries have been made have typical oil recovery rates of 16-24%, which would give recoverable reserves for Azar of 320-480mn barrels.
While Hydro is keen to pursue the development of the Anaran block discoveries and other exploration and development prospects in Iran, much new projects work is on hold while a planned merger between Hydro and Statoil is concluded. A potential obstacle is the need for the merger to be approved by the US authorities, which are increasingly targeting companies and banks doing business with Iran under unilateral sanctions, because of Statoil’s SEC listing (MEES, 25 December 2006)
