Contractors have submitted bids for a revised supervision deal for the first phase of Yadavaran oilfield development in Iran.

China’s Sinopec, which is partnering with National Iranian Oil Company (NIOC) in the development, informed bidding contractors in June that it was extending the engineering, procurement and construction (EPC) period from to 33 months, from the original 22 months.

Iran crude oil production (1999-2009)
Year Production (‘000 barrels a day) 
1999             3,603
2000             3,855
2001             3,892
2002             3,709
2003             4,183
2004             4,248
2005             4,234
2006             4,286
2007             4,322
2008             4,327
2009             4,216
Source: BP

“Sinopec has also asked for extra facilities from the supervising firm, such as offices and accommodation for a large number of staff” says a contractor based in Tehran.

At least three local contractors are thought to have submitted proposals for the project management consultancy (PMC) deal on 5 July, including Namvaran Engineering & Management, Bina Consulting Engineers and Radha Engineering Consultant Company.

“We expect they will open the proposals next week”, says the contractor. The winning firm will supervise eight EPC deals which Sinopec tendered earlier this year.  A number of local companies were invited to bid for the deals, but Sinopec stipulated that firms would only be permitted to bid for the EPC or PMC deals.

The development will take place in three phases with phase one covering the first round of drilling and production. “Phase one was meant to last for two years, but this has been extended and will last almost three years”, says a source close to the deal.

Phases one and two are expected to produce around 85,000 barrels a day (b/d) and 185,000 b/d respectively. But the construction of early production facilities at the Yadavaran field in southwest Iran is already running a year behind schedule and work is now expected to start-up at the end of 2011. Sinopec is expected to begin drilling operations at the Yadavaran oil structure by the end of July.

Fist signed in 2004, the long awaited $2bn deal was only finalised in April 2008. Sinopec owns 51 per cent of the development, NIOC 20 per cent and India’s ONGC Videsh (OVL) the remaining 29 per cent.

The Yadavaran field in the Khouzestan province, close to the Iraqi border, contains some 18.3 billion barrels of crude oil. Of this about 3.2 billion barrels are recoverable. Meanwhile, its gas reserves stand at 12.5 trillion cubic feet, with 2.7 trillion recoverable.