28 August Petroleum Argus

Eni Clarifies Darkhovin Contract Details


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- Eni of Italy has clarified contract details of its Darkhovin oil project by saying it has agreed a two-year guarantee with the National Iranian Oil Company (NIOC) on production for the first phase.

"In the event the estimated production values are not reached, penalties, if any, will be added to the remuneration," the weekly newsletter quoted an official statement from the Italian oil company saying. Petroleum Argus said that it had been previously told by an Eni official that the company had persuaded NIOC to accept a guarantee that lasted less than 12 months.

The Dlrs 1 billion Darkhovin project, signed at the end of June, was hailed as the first to be agreed under Iran's enhanced buy-back formula, aimed to tie foreign companies into longer-term investment in Iran. The weekly newsletter quoted Iran's former deputy oil minister for international affairs, Mehdi Hosseini saying that the contract goes a long way to assuring a commercially viable production ceiling for the repayment period.

The first phase of Darkhovin development envisages the drilling of eight production wells, construction of plants for oil treatment, re- injection of associated gas and shipping production of 50,000 barrels per day. The second phase increases production to 160,000 bpd.

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