TOTAL (TOT) Signs Deal To Develop South Pars Gas Field
Zacks Investment Research | Jul 04, 2017 08:21AM ET
TOTAL S.A. (NYSE:TOT) announced that it has signed an agreement with the National Iranian Oil Company (NIOC) for the development and production of phase 11 of South Pars (SP11). This project will have a capacity to produce 2 billion cubic feet of gas per day or 400,000 barrels of oil equivalent per day including condensate.
Details of the Project
TOTAL is the operator of the SP11 project with a 50.1% interest. The Chinese state-owned oil and gas company, CNPC (30%), and Petropars (19.9%), a wholly owned subsidiary of NIOC, are the other partners.
SP11 project will be developed in two phases. In the first phase, nearly $2 billion will be invested to develop 30 wells and two wellhead platforms connected to existing onshore treatment facilities by two subsea pipelines. In the second phase, an offshore compression facility will be developed on the South Pars field.
This project is scheduled to start commercial operation from 2021 and to supply natural gas for the Iranian domestic market under a 20-year contract.
TOTAL’s Reentry in Iran
This project marks the reentry of TOTAL in this reserve rich Middle-East nation, which it exited in 2006. TOTAL is the first among the global oil & gas major to strike a deal with the Iranian administration and begin work for the development of existing resources of Iran.
Through this investment In Iran, TOTAL will be able to expand its presence in the reserve rich Middle-East region. In addition, exposure in Iran is in line with the company’s strategy to develop gas assets in low-cost and long-reserve region.
Overall, TOTAL continues to work on its strategy to increase production by 4% in 2017 from 2016 levels. The startup of new projects in the first half of 2017 and projects lined up to start in later 2017 will help the company to achieve its production target.
Other Deals
Apart from TOTAL, oil and gas operators like Royal Dutch Shell (LON:RDSa) Plc. Zacks Investment Research
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