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Iran has decided to use local firms to develop a large offshore natural gas field, which was discovered by an Indian company and set to be developed by a group of Indian firms, Press Trust of India reported on Monday, citing sources with direct knowledge of the plans.
An Indian consortium led by ONGC Videsh discovered the huge Farzad-B gas field back in 2008. Iran and India have since negotiated the terms of the field’s development for years, in fits and starts.
Three years ago, the Indian consortium led by ONGC Videsh offered Iran US$11 billion in investments into the Farzad-B field on the condition that the Iranian authorities can guarantee it a reasonable level of returns. Reasonable, ONGC said in 2017, was 18 percent, according to the managing director of the company’s overseas investment arm.
Negotiations between Indian companies and Iran on the development dragged on for years, with pressure building between the parties in 2017 after Iran delayed its final decision about the field several times. India responded to the delays with threats of reduced Iranian oil imports.
Iran added fuel to the fire at the end of May 2017 when it signed an initial agreement for Farzad-B with Russia’s gas giant Gazprom. The news, announced by Oil Minister Bijan Zanganeh, came on the back of earlier remarks that Russian energy companies may take the place of Indian sector players in Iran’s oil and gas fields.
After a few more years of stalled development talks, also because of the U.S. sanctions on Iran’s energy industry, it now looks like Iran has decided to forgo the use of foreign firms and replace the Indian consortium with domestic companies.
According to Press Trust of India’s sources, the National Iranian Oil Company (NIOC) told ONGC Videsh in February 2020 that it planned to sign a contract to develop the Farzad-B field with an Iranian company. ONGC Videsh, however, continues to seek contact with Iran about the field, but Iran hasn’t responded to the Indian firm yet, the sources said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
It seems whenever India and Iran got close to making something happen the Indians have chicken out when they got a call from the US. In the past 20 years, the Indians have supported the US backed nuclear sanctions, voted against Iran in every international forum, and kept quite while its “ancient” friend suffered to please the US, Israel and Saudi Arabians. Overall, in any confrontation India has always backed down when it has come to Iran. However, what does India have to show for all this? Not much.
Worthy trade or defense treaty with US or Israel? Nope.
Tougher action against Pakistan? Nope.
Cheaper oil from the Saudis? Nope.
Better treatment of Indians in US immigration courts and for visa quotas? Nope.
It’s been a one way street. Indian leaders have become nice PR photo-ops for US ,UK, and Israeli politicians and the Indian political elite love the lime light of the western paparazzi. However, one needs to ask them about actual results.
As for the Iranians, they are going to team up with China and move away from India. For instance, they are going to give Chabahar to the Chinese which will exclude India from Iran and Afghanistan and central Asia. For them, India has been a bad bet and despite promises India has not stepped up which is very surprising for the Iranians and deeply embarrassing for the Iranians to be dissed like this. Therefore, despite the fact that the Indians and Iranians have long standing cultural and historical ties (friendship), it is clear that India believes its ties with the US and its allies are worth more. However, if India is not careful, the Chinese are going to encircle them soon and Iran is going to be part of the coalition against it.