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Danan, Cheshmeh Khosh Fields Waiting for Foreign Investment

Among scores of oil and gas fields introduced at an international conference in Tehran for development under the new model of oil contractual framework, there are fields which may need less investment and work than offshore and complicated fields. One of such fields is Danan oil field in Ilam Province along Iran’s border with Iraq.

Danan, Cheshmeh Khosh Fields Waiting for Foreign Investment
(Saturday, September 24, 2016) 10:04
Danan oil field is located 80 kilometers northwest of Andimeshk and 30 kilometers southeast of Dehloran. This field incorporates Bangestan and Asmari reservoirs. 

In this field, Ilam and Sarvak formations – measuring respectively 85 and 750 meters thick – form Bangestan Reservoir whose thickness is 835 meters.

At present, 26 tb/d of crude oil is being extracted from Danan field before being carried to Dehloran production center through pipeline. After being sweetened, it is pumped through a 52-kilometer pipeline to Cheshmeh Khosh desalting unit.

Danan is administered by Iranian Central Oil Fields Company (ICOFC). A variety of scenarios have so far been envisaged at National Iranian Oil Company (NIOC) for the development of Danan field. The broad lines for the development of Danan field (scenarios categorized under natural depletion, water injection and gas injection) have been submitted and experts have offered their views.

In studying Danan field, after the reservoir’s properties are examined, a static and dynamic model is designed and the performance of the reservoir is studied under different scenarios. Natural depletion scenario includes drilling new wells, including vertical and directional wells, and gas injection scenario involves returning gas to an injection well in the reservoir.

These studies have indicated that in the gas injection scenario, oil production wells face the problem of high GOR, while in water injection scenario, the volume of injected water is limited due to the low permeability of reservoir rock; therefore the recovery rate could not be improved.

Thus, the best scenario for the development of Danan field is natural depletion which involves drilling new wells with high diversion and spudding directional wells in order to establish further contract with the rock reservoir. Application of this method will require a fewer number of wells than vertical drilling.

The contract for exploration and development of Danan block was signed between NIOC and a Vietnamese company in March 2008 for exploration and development activities, identification and evaluation of hydrocarbon deposits in this block and winning cooperation of top international companies in the upstream sector after issuing tender bids. The Vietnamese party has so far invested more than $20 million in this block.

OMV Ready to Develop Cheshmeh Khosh

Cheshmeh Khosh which was explored in 1964 and started production 11 years later is one of old fields in western Iran. Its current output stands at 18,000 b/d and its gas production stands at 3.3 mcm/d.

Cheshmeh Khosh is located in Ilam Province in western Iran. It is 52 kilometers south of Dehloran and 70 kilometers west of Andimeshk.

The oil produced from this field is processed before being carried to Ahvaz-3 production plant through a 153-kilometer pipeline. This oil is finally brought to Kharg Island in order to feed refineries or to be exported through Kharg oil terminal.

Cheshmeh Khosh is run by ICOFC and it currently needs investment and state-of-the-art technology in order to preserve and enhance its output.

Iranian oil officials introduced this field for investment at the conference on oil contracts. This field was so attractive for investors that Austria’s OMV was quick to voice its readiness for its development.

This expression of readiness for the development of Cheshmeh Khosh under new oil contracts comes as Iranian oil officials have always said that these fields will be put out to tender.


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