The partners developing Iran’s North Azadegan oil field have invited firms to bid for the contract to build early production facilities.

Tenders were issued on 13 February by China National Petroleum Corporation (CNPC), the majority stakeholder in the field and Petroleum Engineering & Development Company (Pedec), a subsidiary of state-owned National Iranian Oil Company (NIOC). Pedec has been acting as the operator of the field.

A pre-bid meeting will be held on 20 February and site visits will be held on 23 and 24 February. Deadlines for submissions have not yet been released.

Most of the firms bidding are expected to be joint ventures of local and Chinese firms, says a source close to the process. But the project structure is different to that employed at the Yadavaran field, where the operator, China’s Sinopec tendered multiple engineering procurement and construction (EPC) and supervision packages.

“The client wants to award the whole EPC deal to a single contractor,” says the source.

China National Petroleum Corporation (CNPC) signed a memorandum of understanding in January 2009 to develop the northern part of the field through its subsidiary, China National Oil & Gas Exploration & Development Company (CNODC).

CNPC holds a 70 per cent stake in the Azadegan field, while state-owned Naft Iran Intertrade Company (Nico) retains a 20 per cent stake in the field, and Japan’s Inpex Corporation holds the remaining 10 per cent stake. The Japanese firm said in October 2010 that is was considering a withdrawal from the project, as it found it difficult to commit financially in the face of increasing US pressure and sanctions.

The field lies in marshland 80 kilometres west of the city of Ahwaz in the Khuzestan province near Iran’s border with Iraq. It contains an estimated 33 billion barrels of reserves, with 6 billion barrels recoverable.

Nico and CNPC differ on their expectations for the Azadegan field. Nico had hoped to reach 150,000 barrels a day (b/d) in its first phase by 2008 and as much as 260,000 b/d in phase two by 2012, but progress has been slow. It only reached 50,000 b/d in July 2010 (MEED 7:7:10).

However, CNPC hopes to reach a 75,000 b/d production rate by 2013 and 150,000 b/d output by late-2015. Even this schedule looks tight as a result of delays in gaining investment commitments.