{"id":843531,"date":"2025-04-25T17:12:15","date_gmt":"2025-04-25T22:12:15","guid":{"rendered":"https:\/\/newsycanuse.com\/index.php\/2025\/04\/25\/17b-in-new-deals-for-worlds-largest-gas-field-may-indirectly-go-to-russia\/"},"modified":"2025-04-25T17:12:15","modified_gmt":"2025-04-25T22:12:15","slug":"17b-in-new-deals-for-worlds-largest-gas-field-may-indirectly-go-to-russia","status":"publish","type":"post","link":"https:\/\/newsycanuse.com\/index.php\/2025\/04\/25\/17b-in-new-deals-for-worlds-largest-gas-field-may-indirectly-go-to-russia\/","title":{"rendered":"$17B in New Deals for World\u2019s Largest Gas Field May Indirectly Go to Russia"},"content":{"rendered":"<div id=\"pagecontent\">\n<div>\n<div id=\"singleArticle__sidebar\">\n<div>\n<p><img decoding=\"async\" src=\"https:\/\/d32r1sh890xpii.cloudfront.net\/avatars\/medium\/a7d4313281b8f1d92ace94e03d9ca34c.png\" alt=\"Simon Watkins\" title=\"Simon Watkins\" previous-src=\"data:image\/png;base64,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\"><\/p>\n<p>Simon Watkins<\/p>\n<p>Simon Watkins is a former senior FX trader and salesman, financial journalist, and best-selling author. He was Head of Forex Institutional Sales and Trading for\u2026<\/p>\n<p><a href=\"https:\/\/oilprice.com\/contributors\/Simon-Watkins\">More Info<\/a><\/p>\n<\/p><\/div>\n<div>\n<p><h3>Premium Content<\/h3>\n<\/p>\n<ul>\n\t\t\t\t\t\t\t\t\t    <\/ul>\n<\/p><\/div>\n<\/p><\/div>\n<div id=\"singleArticle__content\" data-spons=\"0\" data-id=\"40555\">\n<p><span>By <a href=\"https:\/\/oilprice.com\/contributors\/Simon-Watkins\">Simon Watkins<\/a> &#8211; Apr 07, 2025, 5:00 PM CDT<\/span><\/p>\n<div id=\"key_points\">\n<ul>\n<li><strong>Iran has awarded US$17 billion of contracts to attempt to reverse a dramatic projected production decline from the world\u2019s biggest gas reservoir.<\/strong><\/li>\n<li><strong>Qatar is in the midst of a programme to boost output from its side of the South Pars\/North Dome reservoir through pressure-enhancement techniques.<\/strong><\/li>\n<li><strong>Iran&#8217;s $17B South Pars gas contracts signal Russia to speed up delayed projects, with Moscow set to gain discounted gas and major control over output and pricing.<\/strong><\/li>\n<\/ul><\/div>\n<div>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<picture><source media=\"(max-width: 480px)\" ><source media=\"(min-width: 480px)\" ><img decoding=\"async\" src=\"https:\/\/d32r1sh890xpii.cloudfront.net\/article\/718x300\/2025-04-07_i824mmjwz5.jpg\" alt=\"Russia Iran flags\" title=\"Russia Iran flags\" previous-src=\"https:\/\/d32r1sh890xpii.cloudfront.net\/article\/718x300\/2025-04-07_i824mmjwz5.jpg\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/picture>\n\t\t\t\t\t\t<\/div>\n<div id=\"article-content\">\n\t\t\t\t\t\t    <body><\/p>\n<p>Iran has awarded US$17 billion of contracts to attempt to reverse a dramatic projected production decline from the world\u2019s biggest gas reservoir. Its South Pars field spans 3,700 square kilometres and holds an estimated 14.2 trillion cubic metres (tcm) of gas reserves plus 18 billion barrels of gas condensate. In addition to generating nearly 80% of Iran\u2019s gas production, it also accounts for around 40% of its total estimated 33.8 tcm of gas reserves (mainly located in the southern Fars, Bushehr, and Hormozgan regions). The other part of the huge gas reservoir is Qatar\u2019s 6,000 square kilometre North Dome (or \u2018North Field\u2019), which is the foundation stone of its world-leading liquefied natural gas (LNG) exporter status. Crucially in this respect, Qatar is in the midst of a programme to boost output from its side of the South Pars\/North Dome reservoir through pressure-enhancement techniques. This will only worsen the production outlook for Iran, according to its Petroleum Ministry. So, can these huge new contracts reverse the forecast huge drop in South Pars\u2019 critical gas output?<\/p>\n<p>According to official Iranian government figures, the entire South Pars site currently produces around 700 million cubic metres (mcm\/d) per day. Iran\u2019s Petroleum Ministry has recently projected that the decline in production will be around 28 million cubic metres per year (mcm\/y) from 2027 onwards \u2013 a fall of about 1% a year. It has added that this may increase to a loss of 42 mcm\/y after 2029 \u2013 a drop of 1.6% a year. However, a senior source who works closely with the Ministry exclusively told <em>OilPrice.com<\/em> last week that these are likely to be \u201csignificant underestimates, depending on the variables.\u201d Indeed, according to recent assessments from Iran\u2019s own National Development Fund, Iran\u2019s overall gas production will fall by at least 25% within the next 10 years due to falling pressure in the fields, with South Pars seeing a 30% decline over the period. Worse still was the forecast made last year by Mansour Daftarian, president of the Iranian Petroleum Institute, that in the absence of a major upgrade in the upkeep of the South Pars gas fields, by the end of 2026 daily gas production could drop to as low as 200 mcm\/d, leaving a significant gap in the supply of gas for domestic heating and industrial consumption.\u00a0<\/p>\n<p><strong><span><a href=\"http:\/\/oilprice.com\/Latest-Energy-News\/World-News\/Reuters-Survey-Shows-OPEC-Output-Down-110000-Bpd-in-March.html\" target=\"_blank\" rel=\"noopener\">Related: Reuters Survey Shows OPEC Output Down 110,000 Bpd in March<\/a><\/span><\/strong><\/p>\n<p>One of the key determinants on exactly how much Iran\u2019s gas production will fall is how the firms awarded the big new contracts will develop each of the wells. According to the Iran source, in the period between early 2017 when Qatar lifted the longstanding moratorium on production from its own North Dome and when the U.S. unilaterally exited the Joint Comprehensive Plan of Action (JCPOA, of \u2018nuclear deal\u2019) in May 2018, Iran and Qatar had worked on ways of developing the reservoir without damaging its long-term potential, analysed in full in my latest book on the\u00a0<a href=\"https:\/\/www.amazon.co.uk\/dp\/B0C2RRNWNY\">new global oil market order<\/a>. \u201cDevelopment at that time on the Iranian side wasn\u2019t spectacular but it was consistent, and it generally abided by the conditions aimed at safeguarding the field\u2019s integrity that had been agreed with Qatar,\u201d he said. \u201cHowever, after the U.S. reimposed all the sanctions on Iran after it withdrew from the JCPOA, the local Iranian firms that took over didn\u2019t have the skill, experience, technology, or machinery to take up where the foreign firms had left off, and they were also under pressure to drill more to monetise the gas,\u201d he told OilPrice.com. \u201cThis meant they often rushed the excavations without much thought to maintaining the structural integrity of the wells, and this has significantly affected future output from several of them,\u201d he added.<\/p>\n<p>Unfortunately for Iran, its choice of willing partners to help it prevent such catastrophic gas production declines has become a lot more limited in recent weeks and months. China\u2019s help for the country with which it had signed the \u2018<em>Iran-China 25-Year Comprehensive Cooperation Agreement\u2019<\/em>, as first revealed anywhere in the world in my\u00a0<a href=\"https:\/\/pemedianetwork.com\/petroleum-economist\/articles\/geopolitics\/2019\/china-and-iran-flesh-out-strategic-partnership\">3 September 2019 article<\/a>\u00a0on the subject and also fully detailed in my\u00a0<a href=\"https:\/\/www.amazon.co.uk\/dp\/B0C2RRNWNY\">latest book<\/a> has markedly diminished as a result of greater scrutiny of the relationship by the U.S. Meanwhile, Washington\u2019s programme of exerting maximum pressure on Iran extends to all firms and individuals from any countries who are associated with Tehran\u2019s oil and gas trading, among multiple other business areas, including from China and Hong Kong. This comes on top of Chinese funding for Iran having already been reduced as a result of Beijing\u2019s struggle to fully recover economically from three years of Covid and its Draconian \u2018Zero Covid\u2019 policy. Russia has also seen its economy hit from sanctions as the war in Ukraine has dragged on. \u201cSome of the procedures needed to significantly turn things around at South Pars could only be done using technology and equipment and expertise available at just the top Western firms, like TotalEnergies, which was involved on [South Pars] Phase 11 before the U.S. pulled out of the JCPOA,\u201d the Iran source exclusively told OilPrice.com last week. \u201cFor example, for that Phase alone, it [TotalEnergies] was going to build a huge [20,000-ton] platform, which is much larger than anything on South Pars and two massive compressors, and the site needs around 15 of those platforms and about 30 of those compressors to help maintain pressure,\u201d he said. \u201cNone of the Iranian firms that have been granted the contracts could achieve anything like that,\u201d he added. \u201cIran has never built even a 4,000-ton platform, and the [Petroleum] Ministry confirmed recently that it is still working on the support infrastructure required to build such a piece of equipment,\u201d he underlined.<\/p>\n<p>That said, the four companies given the US$17 billion awards \u2013 officially at least &#8212; are Petropars, MAPNA Group, Oil Industries Engineering and Construction, and the Islamic Revolutionary Guard Corps\u2019 Khatam al-Anbiya Construction Headquarters (Khatam). \u201cUnofficially, the [Petroleum] Ministry\u2019s direct comments on the projected fall in gas output from South Pars was a message to Russia that its companies that were handed the relevant contracts from 2019 to 2024 by Khatam should finally get on with them and make substantive progress,\u201d said the Iran source. \u201cThe Russian firms will now take up to 35% of the increased output at a discount of 30-35% using the moving six-month average price,\u201d he added. Making the deal even more appealing to Russia is how these South Pars contracts will bolster its usefulness to Beijing in the increasingly unequal relationship between the two countries.\u00a0 \u201cInterestingly the Russian side has already set up multiple intermediary shell companies in Singapore, Malaysia and Indonesia that will act as buyers on behalf of the Chinese in an attempt to bypass the new US sanctions,\u201d the Iran source told OilPrice.com. \u201cThe final financial structure of the deal is still fluid, but the Russians will not lose money on the deal and they will also secure unchallenged control of South Pars\u2019 gas production levels and the price at which it is sold,\u201d he concluded. \u00a0<\/p>\n<p>By Simon Watkins for Oilprice.com<\/p>\n<p><strong>More Top Reads From Oilprice.com<\/strong><\/p>\n<ul>\n<li><span><strong><a href=\"http:\/\/oilprice.com\/Latest-Energy-News\/World-News\/Your-Next-iPhone-Could-Cost-2300But-Oil-Prices-Might-Stay-Stuck.html\" target=\"_blank\" rel=\"noopener\">Your Next iPhone Could Cost $2,300\u2014But Oil Prices Might Stay Stuck<\/a><\/strong><\/span><\/li>\n<li><span><strong><a href=\"http:\/\/oilprice.com\/Energy\/Energy-General\/Taiwan-Invested-165-Billion-Trump-Hit-Back-With-Tariffs.html\" target=\"_blank\" rel=\"noopener\">Taiwan Invested $165 Billion. Trump Hit Back With Tariffs.<\/a><\/strong><\/span><\/li>\n<li><span><strong><a href=\"http:\/\/oilprice.com\/Energy\/Crude-Oil\/LIVE-Oil-Prices-Continue-to-Fall.html\" target=\"_blank\" rel=\"noopener\">LIVE: Oil Prices Continue to Fall<\/a><\/strong><\/span><\/li>\n<\/ul>\n<p><\/body>\t\t\t\t\t\t    <\/p><\/div>\n<div>\n<h5>Download The Free Oilprice App Today<\/h5>\n<p><a href=\"https:\/\/itunes.apple.com\/in\/app\/oilprice\/id1389772617?mt=8\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" alt=\"Download Oilprice.com on Apple\" width=\"169\" height=\"50\" src=\"https:\/\/d1o9e4un86hhpc.cloudfront.net\/a\/img\/cl\/app\/appstoredownload.svg\"><\/a><br \/>\n\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/play.google.com\/store\/apps\/details?id=oilprice.android.app\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" alt=\"Download Oilprice.com on Android\" width=\"169\" height=\"50\" src=\"https:\/\/d1o9e4un86hhpc.cloudfront.net\/a\/img\/cl\/app\/androidbutton.png\" previous-src=\"https:\/\/d1o9e4un86hhpc.cloudfront.net\/a\/img\/cl\/app\/androidbutton.png\"><\/a>\n\t\t\t\t\t\t\t\t<\/p>\n<\/div>\n<p><a href=\"https:\/\/oilprice.com\/\">Back to homepage<\/a><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<div>\n<p><img decoding=\"async\" src=\"https:\/\/d32r1sh890xpii.cloudfront.net\/avatars\/medium\/a7d4313281b8f1d92ace94e03d9ca34c.png\" alt=\"Simon Watkins\" title=\"Simon Watkins\"><\/p>\n<div>\n<h3>Simon Watkins<\/h3>\n<p>\n\t            Simon Watkins is a former senior FX trader and salesman, financial journalist, and best-selling author. He was Head of Forex Institutional Sales and Trading for\u2026\t          <\/p>\n<p><a href=\"https:\/\/oilprice.com\/contributors\/Simon-Watkins\">More Info<\/a><\/p>\n<\/p><\/div>\n<\/p><\/div>\n<div>\n<h3>Related posts<\/h3>\n<\/p><\/div>\n<p><a href=\"http:\/\/oilprice.com\/#\" id=\"join-discussion\">Leave a comment<\/a><\/p>\n<\/p><\/div>\n<p> Elroy Lupo<br \/><a href=\"https:\/\/oilprice.com\/Energy\/Natural-Gas\/17B-in-New-Deals-for-Worlds-Largest-Gas-Field-May-Indirectly-Go-to-Russia.html\" class=\"button purchase\" rel=\"nofollow noopener\" target=\"_blank\">Read More<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Simon Watkins Simon Watkins is a former senior FX trader and salesman, financial journalist, and best-selling author. He was Head of Forex Institutional Sales and Trading for\u2026 More Info Premium Content By Simon Watkins &#8211; Apr 07, 2025, 5:00 PM CDT Iran has awarded US$17 billion of contracts to attempt to reverse a dramatic projected<\/p>\n","protected":false},"author":1,"featured_media":843532,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3377,1329],"tags":[5799,6420],"class_list":{"0":"post-843531","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-deals","8":"category-worlds","9":"tag-deals","10":"tag-worlds"},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/843531","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/comments?post=843531"}],"version-history":[{"count":0,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/posts\/843531\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media\/843532"}],"wp:attachment":[{"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/media?parent=843531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/categories?post=843531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/newsycanuse.com\/index.php\/wp-json\/wp\/v2\/tags?post=843531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}