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Libyan Oil Production Falls 300,000 Bpd In December

Libyan Oil Production Falls 300,000 Bpd In December

Libya’s crude oil production has…

India To Offer Up To $4B For Iranian Gas Field Development

Farzad B

India will offer Iran a US$3-4 billion investment plan for the giant Farzad B gas field in a bid to secure its participation in the project that last year led to a sharp cooling off in bilateral Indian-Iranian relations.

Reuters quotes two unnamed sources who said that the investment plan could be revealed next week, adding that it followed Tehran’s decision to reduce the scope of the project in response to India’s insistence that it should get a chance to take part.

Farzad B was discovered by Indian companies led by state giant ONGC ten years ago. After the lifting of economic sanctions, Iran began looking for suitors for the field, which holds reserves estimated at more than 350 billion cubic meters of natural gas. Initially, the Indian companies offered US$3 billion for the development of the field, including not just production but the construction of liquefaction facilities and an export terminal as well.

Tehran was meaningfully slow in responding to the proposal, sparking the cool-off, which saw India reduce its imports of Iranian crude as a way of cautioning Tehran. The latter upped the ante by signing a preliminary agreement for the Farzad-B development with Russia’s Gazprom. The Indian consortium came back with an US$11-billion proposal, but this proposal had a condition attached: the Indians wanted guarantees of at least 18 percent returns on the investment.

Apparently, the return rate demand didn’t sit well with the Iranian authorities, but negotiations continued. Recently, they resulted in Iran offering India a deeper freight discount on its crude oil deliveries, to which New Delhi responded by raising the rate of Iranian oil imports.

Now, if the Indian offer is taken, ONGC and its partners will only be responsible for production from Farzad-B, leaving the downstream developments to someone else. If Tehran approves the deal, it could be inked next week when Bijan Zanganeh visits New Delhi.

By Irina Slav for Oilprice.com

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  • goodwritearm on April 05 2018 said:
    This is great for Iran. Keep expanding.

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