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Japan's Toyo Signs Agreement to Develop Iran's Salman Field

Japan's Toyo Engineering Corporation on Monday signed an agreement with the National Iranian Oil Company and Petropars to develop the offshore Salman oil and gas field in the Persian Gulf. [ادامه خبر]

Japan's Toyo Engineering Corporation on Monday signed an agreement with the National Iranian Oil Company and Petropars to develop the offshore Salman oil and gas field in the Persian Gulf.

NIOC deputy chief, Gholamreza Manouchehri, Petropars CEO Hamid Akbari and Hiroshi Sato, a senior executive of Toyo, signed the preliminary agreement in Tehran on Monday, NIOC's news portal reported.

The agreement is aimed at increasing natural gas production and renovating the field's facilities.

Based on the agreement, Petropars, a subsidiary of NIOC, will finance the feasibility studies of Phase 1 and Toyo will bankroll operational costs of Phase 2 of the project.

Salman field is located 142 kilometers south of Lavan Island off Hormozgan Province in the Persian Gulf. It stretches into the UAE territorial waters. The field contains several layers of crude oil as well as a gas layer.

Iran is currently pumping 60,000 barrels per day of crude and a little over 2.2 million cubic meters of gas from the field, according to the latest production data.

In comparison, the country draws more than 50 mcm/d of gas from a standard phase of South Pars, the world's largest gas field shared between Iran and Qatar in the Persian Gulf. Salman's recoverable crude oil reserves are estimated at around 500 million barrels.

Established in 1961, Toyo is a Japanese engineering, procurement and construction company operating mainly in oil, gas and petrochemical sectors. Most of the company's operations are based outside Japan, including in China, India, Indonesia, Iran and Russia.

Toyo offers wide-ranging services, including design, engineering, equipment procurement, construction, test operations and technical guidance in the fields of chemicals, petrochemicals, oil refinement, natural gas, electric and nuclear power, medical facilities and biotechnology.

The agreement with Toyo marks the second deal signed by Petropars this month on developing oil and gas fields.

Hailed as the largest Iranian exploration and production company, Petropars signed a deal on July 3 to develop Phase 11 of South Pars Gas Field alongside French energy major Total and China's state-controlled CNPC. Petropars is a minority stakeholder in the gas venture.

Salman's History

The first crude oil production from Salman dates back to over 50 years. Output reached a peak level of 234,000 barrels per day during 1973-78 but production gradually declined, as the field continued to age.

But efforts to raise the recovery factor at Salman oil and gas field have largely been futile since early 2000s.

According to an NIOC report, Iran has failed to boost production from the joint reservoir due to a mix of factors, including financial constraints, failure of contractors to meet their ends as well as sanctions that stripped Iran of cash and know-how to develop the field.

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