Iran’s Petroleum Engineering and Development Company (PEDEC) has started production from South Yaran, an oilfield it shares with Iraq.

In a statement released by the National Iranian Oil Company (NIOC) PEDEC’s Chief Executive Officer Noureddine Shahnazizadeh said that production started last week.

"Upon the completion of drilling operations for six wells at the site, 10,000 barrels of crude are being extracted per day from Yaran's southern flank," he said.

Shahnazizadeh also said that output had reached 30,000 barrels per day from the North Yaran field and plans are in place to triple the output using enhanced oil recovery techniques.

Yaran Oilfield is divided into the north and south sections and adjoins Iraq's Majnoon Oilfield at the Iran-Iraq border.

Its reserves are estimated to be around 2 billion barrels of oil.

NIOC’s South Yaran Oil Field Development project has an estimated budget of $2bn.

So far, only one contract has been awarded on the South Yaran scheme. This contract was for drilling 40 wells as well as associated facilities and was worth $456m.

According to the project tracking service MEED Projects, the main contractors on the contract are Tehran-based Naftkav Engineering Services Company and Khatam al-Anbiya Construction.

Khatam al-Anbiya Construction is Iran’s biggest construction company and is controlled by the Islamic Revolutionary Guard Corps.

In January this year, PEDEC said that production would start in March, but the project has suffered from significant delays. PEDEC has not given a reason for the delay.