Iran and Oman have signed an agreement to jointly develop the shared Hengam offshore oilfield in the Strait of Hormuz.
The deal is “aimed at preparing a Master Development Plan (MDP) for the joint oilfield, and different scenarios for further development and bilateral co-operation on the exploitation of the field”, Shana, the Iranian Oil Ministry’s news service, reported on Monday.
“This is the first agreement on co-operation between Iran and a neighbouring country in a shared field.”
The agreement to develop the Hengam oilfield, which straddles Iran and Oman’s offshore waters, follows a bilateral memorandum of understanding signed last year.
A development contract is pending and will be signed after the MDP preparation, Shana added.
The Hengam oil and gas field lies 70 kilometres offshore Iran and is operated by the Iranian Offshore Oil Company.
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Joint development
Iranian Oil Minister Javad Owji said last year that a joint technical committee was being formed to develop the next phases of the oilfield between Iran and Oman in a seamless manner.
Both countries had previously signed an agreement in 2005 to jointly develop the Hengam field — the reservoir of which is shared by Iran and Oman — but the deal did not materialise and Iran decided to develop the field independently in 2012.
However, in a fresh impetus to the development, Owji said last year that “joint exploitation, in contrast to competitive exploitation, will be mutually beneficial to both countries as this method leads to less damage to the reservoir and allows for more extraction”.
While current output from Hengam could not be confirmed by Upstream, it is said to be producing about 30,000 barrels per day.