India set to lose Farzad-B gas field in Iran

India has all however misplaced the ONGC Videsh Ltd-discovered Farzad-B gasoline discipline within the Persian Gulf after Iran determined to want home firms over international companies for growth of the sector, sources mentioned.

ONGC Videsh Ltd (OVL), the abroad funding arm of state-owned Oil and Natural Gas Corp (ONGC), had in 2008 found a large gasoline discipline within the Farsi offshore exploration block.

OVL and its companions had supplied to speculate as much as USD 11 billion for growth of the invention, which was later named Farzad-B.

After sitting over OVL’s proposal for years, the National Iranian Oil Co (NIOC) knowledgeable the agency in February this 12 months about its intention to conclude the contract for Farzad-B growth with an Iranian firm, sources with direct data of the event mentioned.

OVL, nonetheless, continued its engagements with NIOC over the event of the sector and sought phrases and situations of the proposed contract for its analysis, they mentioned, including that Iran has to date not responded to the Indian agency’s request.

Farzad-B holds whole reserves of round 21.7 trillion cubic ft of which round 60 per cent is recoverable, and manufacturing is slated to be round 1.1 billion cubic ft per day.

Sources mentioned unconfirmed data means that Iran has recognized a neighborhood agency for the event of the sector, however OVL has not but given up hopes and continues to chase Iranian authorities for the contract.

The 3,500 sq. kilometre Farsi block sits in water depth of 20-90 metres on the Iranian aspect of the Persian Gulf.

OVL, with 40 per cent operatorship curiosity, signed the Exploration Service Contract (ESC) for the block on December 25, 2002. Other companions included Indian Oil Corp (IOC) with 40 per cent stake and Oil India Ltd (OIL) holding the remaining 20 per cent stake.

OVL found gasoline within the block, which was declared commercially viable by NIOC, on August 18, 2008. The exploration section of the ESC expired on June 24, 2009.

The agency submitted a Master Development Plan (MDP) of Farzad-B gasoline discipline in April 2011 to Iranian Offshore Oil Company (IOOC), the then designated authority by NIOC for growth of Farzad-B gasoline discipline.

A Development Service Contract (DSC) of Farzad-B gasoline discipline was negotiated until November 2012, however couldn’t be finalized on account of troublesome phrases and worldwide sanctions on Iran.

In April 2015, negotiations restarted with Iranian authorities to develop Farzad-B gasoline discipline below a brand new Iran Petroleum Contract (IPC). This time, NIOC launched Pars Oil and Gas Company (POGC) as its consultant for negotiations.

From April 2016, either side negotiated to develop Farzad-B gasoline discipline below an built-in contract masking upstream and downstream, together with monetization/advertising and marketing of the processed gasoline. However, negotiations remained inconclusive.

Meanwhile, on the premise of a brand new research, a revised Provisional Master Development Plan (PMDP) was submitted to POGC in March 2017, sources mentioned, including that in April 2019, NIOC proposed growth of the gasoline discipline below the DSC and offtake of uncooked gasoline by NIOC at landfall level.

However, on account of imposition of US sanctions on Iran in November 2018, technical research couldn’t be concluded which is a precursor for business negotiations.

The Indian consortium has to date invested round USD 400 million within the block.