If India backs out of the Farzad-B natural gas block deal, Russian companies could be stepping in to fill the vacuum, according to remarks by Iranian Oil Minister Bijan Zangeneh on Thursday.
It originally looked as if the field in the Persian Gulf would be offered to India after the country offered a $3 billion investment plan, but Tehran has been on the lookout for better bids since negotiations with the Asian country became topsy-turvy. A consortium of Indian companies originally discovered the field in 2008, before international sanctions against Iran for its controversial nuclear program went into effect.
Last week, there were signs that talks between India and Iran regarding the deal had broken new ground.
"Senior officials in both countries are willing to discuss and find an agreement over the Farzad B project," Iranian Deputy Oil Minister Amirhossein Zamaninia said. "The two sides agreed to a meeting between representatives of ONGC Videsh (OVL) and National Iranian Oil Company executives, including chief executive officer Ali Kardor and deputy for development and engineering, Alireza Manouchehri."
The foreign wing of the Oil and Natural Gas Corporation Ltd. of India (ONGC) began the process of acquiring the rights to develop the Farzad-B block in the Persian Gulf back when sanctions against Tehran were lifted last year. It is estimated to contain over 350 billion cubic meters of natural gas, with a productive life of 30 years. Iran argues that the ONGC's $3 billion proposal to work in the natural gas reservoir are not financially attractive.
As a result, New Delhi had instructed local refiners to shrink the input from Iran to 190,000 barrels daily from 240,000 bpd - close to half of the total daily import rate for Iranian crude for the period from April 2016 to this February. In fact, Iran managed to get to the number 3 spot among the top crude oil exporters to India, after Iraq and Saudi Arabia.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More