Iran and Oman sign deal to develop huge shared offshore oilfield



Iran and Oman have signed an agreement to jointly develop the shared Hengam offshore oilfield that lies in the Strait of Hormuz in the Persian Gulf region.

The deal is “aimed at preparing a Master Development Plan (MDP) for the joint oil field, and different scenarios for further development and bilateral cooperation on the exploitation of the field,” Shana, Iran’s Oil Ministry’s news service reported on Monday.

“This is the first agreement on cooperation between Iran and a neighbouring country in a shared field,” it said.

The agreement to further develop the Hengam oilfield, which straddles Iran and Oman’s offshore waters, follows a memorandum of understanding (MoU) signed between the two nations last year.

While the two nations have agreed to the further development of the offshore oilfield, a development contract is pending and will be signed after the MDP preparation, the Shana report added.

The Hengam oil & gas field lies 70 kilometres offshore of Iran in the Strait of Hormuz and is operated by the National Iranian Offshore Oil Company (IOOC).

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Joint development

Iranian Oil Minister Javad Owji said last year that a joint technical committee is being formed to develop the next phases of the Hengam oilfield in a seamless manner between Iran and Oman.

Both nations 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 oilfield’s 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 the current oil production from Hengam could not be confirmed by Upstream, it is said to be producing about 30,000 barrels per day of oil, media reports have claimed.