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.