Iran extends deadline for India on Farzad B gas field

Business Materials 10 December 2016 12:08 (UTC +04:00)

Baku, Azerbaijan, Dec. 10

By Fatih Karimov – Trend:

Iran has extended deadline for India to offer an acceptable proposal on development of Iran’s Farzad B gas field, Gholamreza Manouchehri, deputy head of the National Iranian Oil Company (NIOC) for development and engineering affairs, said.

India’s state-run company ONGC has time until March 2017 for a deal with Iran, otherwise the field’s development will be offered to other international companies through a tender, Manouchehri said, Mehr news agency reported Dec. 10.

A delegation from India visited Tehran last week to discuss the differences, he said, adding that, the Indian side has proposed a new model for calculating gas price but Iran is not satisfied with that.

He further said that a fresh round of talks will be held in the next two weeks.

The financial investment model for development of the gas field is the main source of disagreement between the two parties.

Earlier, Bijan Namdar Zanganeh, Iran’s oil minister, said that Tehran is not pleased with the New Delhi-based ONGC’s proposal on development of Farzad B gas field.

Zanganeh said that Iran has granted another opportunity for the Indian side to submit a “reasonable” financial investment model, adding that it will be the last chance for the Indian company and Iran will make “another decision” if ONGC fails to offer a reasonable option.

In 2008, a consortium of OVL (ONGC Videsh Ltd.), Oil India Ltd. and Indian Oil Corp. discovered the Farzad B gas field, which is estimated to contain 12.8 trillion cubic feet of recoverable reserves.

In August 2010, OVL submitted a revised master development plan (MDP) for producing 60 percent of the field's in-place gas reserves, but did not sign a contract with the Iranian side out of fear it would be exposed to sanctions imposed by the US on Iran's energy sector, which did not allow foreign companies to invest more than $20 million a year in the country's energy sector.

After the West lifted sanctions against Iran under the nuclear agreement, OVL proposed a $3 billion field development plan to Iran to develop Farzad B.