Russia’s Lukoil and India’s Reliance Industries are holding talks with National Iranian Oil Company (NIOC) to buy stakes in the country’s giant Azadegan oil field, which has reserves in excess of 40 billion barrels. Lukoil entered talks after the collapse of a previous bid to develop the field by a joint venture of Japan’s Inpex and the state-run oil firm in October 2006. Reliance is thought to have started negotiations in the past few months.
An NIOC subsidiary, Naftiran Intertrade Company, became the majority shareholder on the Azadegan field development in late 2006, after taking over most of the stake held by Inpex.
The Japanese company had its stake in the scheme reduced from 75 per cent to 10 per cent.
A senior Iranian source close to the negotiations says Lukoil and Reliance will hold formal talks with NIOC in early 2008. “There have been a host of firms wanting to get on board but this is a complex project,” says the source. “There should be concrete news in the first quarter of 2008.”
The two companies hope to take 20 per cent stakes in the project, the source says, with Tehran remaining in control.
The project has experienced serious delays due to complex negotiations and the removal of landmines from the area, which is close to the border with Iraq (MEED 13:10:06).
India’s Essar Group announced in March that it was interested in developing the field, but the company is no longer seen as a likely partner for Tehran because of US sanctions. Essar recently bought a US steel firm, Minnesota Steel, for $1.65bn.
In early December, Iran’s recently appointed Oil Minister, Gholam-Hossein Nozari, upped estimates of reserves at Azadegan to 42 billion barrels, from 26 billion barrels following studies.
Later that month, another oil field discovery in north Azadegan was announced, potentially holding reserves of 2.5 billion barrels of oil.
Also in December, NIOC Iranian signed a $2bn investment deal with China’s Sinopec for the development of the Yadavaran field (MEED 10:12:07).