Tehran — Iran on Tuesday signed $1 billion in contracts with local companies to implement enhanced oil recovery at nine aging fields that will add almost 90,000 b/d in production capacity over the next three years.
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The fields are all onshore and are located primarily in Khuzestan, Bushehr and Fars provinces in the country's south.
The oil ministry said this was the first stage of 33 planned investments totaling $7.2 billion to boost oil production by 281,000 b/d, despite US sanctions that have limited Iran's ability to sell crude internationally.
"We wanted to create projects only for Iranian contractors," oil minister Bijan Zanganeh said at the signing ceremony. "We wanted to raise hope among local companies as [the US] wants to cause worry and upset Iranian people by the sanctions."
He added that the projects aim to upgrade Iran's aging facilities, saying: "Many of our old units are in fact operating museums."
Reza Dehghan, the National Iranian Oil Company's deputy managing director for development and engineering, said the projects would be financed 80% by NIOC -- including through a bond issuance -- under a buyback model, and 20% by the contractors involved.
Zanganeh said that once the fields have been operating for a year and a half, they will be required to use their own income to cover implementation costs.
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