After Ukraine was invaded on February 24, 2022, things weren’t meant to go this way as far as Russia and Iran and indeed China are concerned. next to it. In terms of oil and gas, this would have meant that Russian gas flows would continue to flow to Europe through Nord Stream 2 and expand, increasing oil shipments to the south of the continent. This also meant that a huge increase in gas and oil from Iran would be very beneficial to Russia for logistical reasons and pricing control. That’s why, shortly before doing so, President Putin personally ordered several memorandums of understanding (MoUs) to be signed to ensure the continued influence of Russia in the Islamic Republic. But fate could be a capricious mistress, and if that is Putin’s vision, he recommends visiting an optician. is trapped and Iran is unable to make meaningful progress on its flagship gas project, South Perth Phase 11 (SP11).
According to a senior oil and gas industry official who works very closely with Iran’s oil ministry, OilPrice.com Last week, in early 2023, a series of meetings between senior officials of all relevant ministries and companies involved in SP11 was held to put together a progress report for Supreme Leader Ali Khamenei and his team to consider. I was. The final report is divided into three parts, the first of which deals with Russia and China’s involvement after the United States unilaterally withdrew from the Joint Comprehensive Plan of Action (JCPOA) in May 2018 and was reimposed. This is the development history of the SP11 project until it increased. Sanctions against Iran and those who traded with it. This part is very long. The next part is pretty short, but the progress we made on this project while Russia and China were at the helm of the project. The third part is short, like lines from a Samuel Beckett play, and deals with options for moving forward with the current project.
At this point, to summarize why the South Perth gas field is so important to the gas world, and why the Phase 11 project is an important part of it, South Perth is one of two parts. must remember. A 9,700-square-kilometer gas basin that forms the world’s largest gas field by a very long way. This entire gas reservoir contains an estimated 51 trillion cubic meters (tcm) of unrelated natural gas and at least 50 billion barrels of natural gas condensate. His 6,000-square-kilometer section of Qatar – the ‘North Field’ (or ‘North Dome’) – is the cornerstone of the emirate’s position as the world’s leading exporter of liquefied natural gas. His 3,700-square-kilometer section of Iran, the South Purs, has an estimated 14.2 tcm of gas reserves and 18 billion barrels of gas-condensate. South Pars already holds about 40% of Iran’s total estimated 33.8 tcm gas reserves (most of which are in the Fars, Bushehr and Hormozgan regions in the south) and about 80% of gas production. there is
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International oil companies scramble to sign the agreement after the signing of the JCPOA by the “P5+1” group of countries (US, UK, France, Russia, China, “plus” Germany) on 14 July 2015 has occurred. Of the various phases of Southperth development, Phase 11 was the first major phase after the deal was made. The initial target capacity for the phase was 57 million cubic meters of gas per day (mcm/d) – approximately 335,000. Oil barrels per day – however, the first part of the phase will target approximately one-fifth of this amount.
France’s then Total (now Total Energies) held a 50.1% stake in the US$4.8 billion Phase 11 project and had already invested around US$1 billion when the US withdrew from the JCPOA. rice field. then withdraw of the project. At that time, China National Petroleum Corporation (CNPC) automatically assumed a stake in Total (50.1%), as automatically occurred under the terms of the contract, to add to its existing 30% stake. I was. The remaining 19.9% stake was held by Petropars.
Unfortunately for Iran, 2018 was also a time of heightened personal interest in China by then-President Donald Trump, and on August 23, 2018, the United States announced that it would invest another US$16 billion in Chinese goods. % tariffs.The newly imposed US sanctions on Iran and increased personal scrutiny of China by Trump are the projects the Chinese government needs most. was meant to focus more on Beijing’s interest in projects whose need is less urgent, especially the South Perth Phase 11 gas project, has dropped significantly. A further negative factor for China in this context is that South Perth’s gas reservoirs are not shared with Iraq, so as with much of its oil imports from Iran, Iran’s gas from the failure to “re-brand” it as a natural gas.Iraq, as are so many of Iran’s oil fields, analyzed in detail in my last article A book on the world oil market.
Seven deals in the oil and gas sector between Beijing and Moscow, shortly after the US withdrew from the JCPOA, allow Russia to pick up where it left off elsewhere in Iran and support Iran’s own efforts reached an agreement to Until SP11 allowed China to fully re-involve the project. Beijing assumed that would happen any time after Trump’s presidency ended. According to Trump’s National Security Advisor John Bolton, it was former President Barack Obama’s Secretary of State John Kerry who advised Iran to stay in the JCPOA agreement and wait until Trump was no longer president.
Preparations for this were made by Russia and Iran when Iranian President Ebrahim Raisi visited the President in Moscow just a month before Russia invaded Ukraine. Javad Owji, Iran’s Oil Minister, commented that some parts of his 20-year cooperation agreement between Russia and Iran were to develop oil and gas fields, build refineries and transfer technology. associated and signed. The foundation work was strengthened by President Putin’s reciprocal visit to Tehran in July 2022 and his US$40 billion investment signed between the Iranian National Oil Company (NIOC) and Russian gas giant Gazprom. An extensive Memorandum of Understanding (MoU) was signed. .
Gazprom thereby commits its full support to NIOC in the USD 10 billion development of the Kish and North Perth gas fields, with a view to producing more than 10 million cubic meters of gas per day. bottom. The memorandum also details a US$15 billion project to increase pressure on the super-massive South Perth gas field on the Iran-Qatar maritime border. Gazprom also pledged support for the completion of various liquefied natural gas projects and the construction of gas export pipelines.
The problem with this is that a senior source at the European Union’s Energy Security Agency told OilPrice.com EXCLUSIVELY last week that an invasion of Ukraine would prove to be as quick and easy and an affair as Putin intended. There was no[Putin] I thought it would be over in a week and business as usual after that, but when Ukraine didn’t collapse and America and Europe fell behind Kyiv, Putin announced NATO Mark 2 and economic sanctions against Russia. I also found myself dealing with,” he said. “Russia currently has nothing to give Iran. No machinery, no technology, no personnel. No money. Only promises to deliver military supplies like the upgraded S-300. [missile defence system] and Sukhoi 35 [fighter jets]and even if they eventually keep their promise, it’s not going to help Iran get more gas from South Perth.
By Simon Watkins of Oilprice.com
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