Shell to Study Iranian Giant

Anglo-Dutch major Shell signed three heads of agreements with Iran December 7, including a study of the country’s second biggest gas field, Kish.

According to the non-binding deals, Shell will also study two oil fields, South Azadegan and Yadavaran, jointly with Iraq, Iran's oil ministry announced. The fields lie on both sides of the border.

Iran has drilled 12 wells in Kish, which contains about 1.4 trillion m³ of gas and is the second biggest gas field after South Pars. Iran plans to develop the field in three stages to produce 85mn m³/d of gas.

Iran signed a $10bn agreement with local companies in 2009, but the deal was cancelled owing to financial problems. South Azadegan’s second phase and Yadavaran are expected to produce 300,000 b/d each. The total needed on investment for these fields is estimated about $10-12bn.

With low oil and gas prices the majors are focusing their spending on producing the lowest-cost barrels.

Azerbaijan desk