The construction of early production facilities at the Yadavaran field in southwest Iran is running a year behind schedule, and work is now expected to start-up at the end of 2011.

China’s Sinopec is expected to begin drilling operations at the Yadavaran oil structure by the end of July, sources close to the project tell MEED.

Sinopec, one of China’s largest state-owned energy firms is partnering with National Iranian Oil Company (NIOC) in phase 1 and 2 of Yadavaran, which will produce around 85,000 barrels a day (b/d) and 185,000 b/d respectively.

Phase one of the Yadavaran oilfield project was originally set on a 59-month schedule, ending in late 2016, but this date is now looking doubtful, according to an upstream source in Tehran. This is a result of “difficulties with sanctions associated with the major packages and Chinese inefficiencies”, says the source. “Sinopec are probably six weeks away from spudding [drilling] the first well”.

“The project has two major phases. Phase 1 drilling and exploration, phase 2 production”, explains another Tehran-based source close to the deal. “They [Sinopec and NIOC] are doing phase 1 now and busy with importing drilling equipment etc.”

Sinopec tendered eight engineering, procurement and construction (EPC) deals along with a project management consultancy (PMC) deal.  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.

According to the Tehran source at least three local contractors are competing for the PMC deal. These include Namvaran Engineering & Management, Bina Consulting Engineers, and Radha Engineering Consultant Company. The winning contractor will supervise the eight EPC deals. A decision on the PMC deal could be made by the end of June.

The UK’s Petrofac completed the front end engineering and design (Feed) phase of the development in November last year.

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.