OREANDA-NEWS. June 20, 2017. Italian energy firm Eni is set to take tomorrow a major step towards returning to Iran's upstream oil and gas sector by signing provisional agreements with Iran's state oil company NIOC to study two key fields, according to Iran's oil ministry.

The agreements will be signed with a view to securing contracts to develop the fields in the future.

One project covered by the agreements will be the Darquain oil field, on Iran's border with Iraq, which Eni itself brought online in the mid-2000s. The third phase of the development of this project has been opened to foreign companies for investment under the terms of Iran's new upstream investment contract model, the Iran Petroleum Contract (IPC).

The other project will be the offshore Kish gas field in the Mideast Gulf, which NIOC says holds around 1.4 trillion m? of reserves, and could produce 9bn m?/yr, or close to 25mn m?/d.

This will be the latest in a string of provisional agreements NIOC signed with foreign oil and gas companies since the start of last year as part of its plans to attract foreign companies back to the country's upstream since it was freed of all nuclear-related sanctions in January 2016.

Iran has set out to attract around $185-200bn in oil and gas investment through to 2021, around $130bn of which has been earmarked for the upstream. NIOC managing director Ali Kardor said last week that he expects Iran to close at least $15bn worth of new upstream contracts before the end of the current Iranian year in March 2018.

The Darquain field Eni will be studying was originally brought online in June 2005, four years after the firm signed a $1bn agreement with NIOC to develop it under the terms of the previous buyback contract model, which will be replaced by the IPC.

The start-up of production from the second phase in February 2010 raised output to around 160,000 b/d — a level it is still producing to this day. A third phase development was agreed with Eni in 2011, but was never implemented on account of international sanctions that had been imposed on Iran over its disputed nuclear program.

An Iranian consortium awarded a contract by NIOC to carry out this third phase development in place of Eni ultimately failed to deliver on its commitments, prompting NIOC and the oil ministry in November 2015 to include the development on a list of upstream projects that would be open to foreign companies for development under the new IPC framework.

The existing phase 3 development plan agreed between NIOC and Eni in 2011 aimed to raise production at the field by 60,000 b/d to 220,000 b/d. NIOC has previously said the project to develop phase 3 of the Darquain field would require an investment of about $1.5bn.

Philippines state-owned oil firm PNOC is also studying the Darquain oil field after signing a similar agreement with NIOC in May.