In May 2002, Irans Oil Ministry signed a $585 million buyback contract with NIOC subsidiary PetroIran to develop the Foroozan and Esfandiar offshore oilfields. PetroIran is expected to increase production at the fields to 105,000 bbl/d by late 2005. The two oilfields straddle the border with Saudi Arabias offshore Lulu and Marjan fields.
In other news related to buyback deals, the Cheshmeh-Khosh field, which previously had been awarded to Spains Cepsa for $300 million, was re-awarded in January 2004 to state-owned Central Iranian Oil Fields Company (CIOFC). In December 2003, Cepsa and OMV withdrew from lengthy negotiations after a reported failure to agree on development costs and buyback terms. It remains possible, however, that Cepsa and OMV could still be involved at Cheshmeh-Khosh in some way. The objective is to raise crude production at the field from 40,000 bbl/d currently to 80,000 bbl/d within four years.
Recently, Iran appears to have had some second thoughts about buybacks (including charges of corruption, insufficient benefits to Iran, and also worries that buybacks are attracting too little investment), and reportedly is considering substantial changes in the system. In late May 2002, Canadas Sheer Energy became the first foreign company since Enis Darkhovin deal to reach agreement -- $80 million to develop the Masjed-I-Suleyman, or MIS, field. Sheers goal was to boost MIS production from 4,500 bbl/d to 20,000 bbl/d (the historic field, discovered in 1908, peaked at 130,000 bbl/d in the 1930s), but the company was replaced by Chinas CNPC, which bought the subsidiary of Sheer working on MIS. CNPC began work on the field in June 2005.