Dharmendra Pradhan’s Iran visit may expand energy ties
NEW DELHI: Oil minister Dharmendra Pradhan will visit Tehran on April 9-10, hoping to expand energy
cooperation in the first visit by an Indian minister to Iran since Western sanctions were lifted from the
Persian Gulf country.
His agenda will include ONGC’s participation in developing the Farzad-B gas field, buying additional
crude oil and settling pending payments for earlier oil purchases from Iran. Pradhan will also discuss
projects including petrochemical and fertiliser plants in the special economic zone at Chabahar port,
authoritative sources told ET.
Foreign minister Sushma Swaraj will follow Pradhan, likely on April 17-18, to push political ties on the
heels of Prime Minister Narendra Modi’s Saudi trip as India strives to balance its ties with Riyadh and
Tehran. Iran’s foreign minister, economic development minister and deputy foreign minister have visited
India after Tehran signed a historic nuclear deal with the world powers, creating a huge investment and
market opportunity.
With Iran emerging as India’s principal gateway to Central Asia, Russia and Europe, the Modi
government hopes to give the partnership a push with the high-level visits. Connectivity projects within
Iran and linking the region, besides demand for energy, are driving India’s policy towards Iran, sources
here pointed out.
“The Farzad-B gas field, purchase of oil from Iran and investment in petrochemicals will be the most
important topics of discussions,” Iranian Deputy Petroleum Minister Amir-Hossein Zamaninia told
reporters in Tehran on Monday. A consortium led by India’s Oil & Natural Gas Corporation discovered
Farzad-B in 2008 but was unable to proceed due to the sanctions.
Last year, ONGC submitted a $3 billion proposal to Tehran for development of the field. The Farzad-B
field in the offshore Farsi block is estimated to hold 12.8 trillion cubic feet of gas. Last month, Pradhan
said he was “hopeful” that a deal on Farzad-B could be concluded during his visit to Tehran.
“In Iran, our primary interest is in E&P (exploration and production). We have old engagements with Iran
and we continued to buy oil from Iran in difficult times,” he had told reporters earlier. Sources in the
Iranian government hinted to ET that a deal on Farzad-B may take time. Expressing a similar sentiment,
Zamaninia said, “Negotia tions about the Farzad-B field are a bit time-consuming.”
The issue of India’s pending payments for oil imported from Iran for three years during the period of
sanctions will also figure in Pradhan’s deliberations. Zamaninia said the Central Bank of Iran is currently
negotiating with India and Pradhan will meet bank governor Valiollah Seif to discuss the issue. According
to Seif, India wants to pay an outstanding amount of $6 billion in rupees, while Iran is seeking the
payment in euros.
According to the Iranian government, the three-year-old mechanism of paying 45% of the oil import bill
in rupees and keeping the remaining 55% pending for payment channels to clear has concluded.
Pradhan will also meet Iranian minister of industry, mines and trade Mohammad Reza Nematzadeh and
the secretary of the council of Iran’s free trade, industrial and special economic zones Akbar Torkan to
discuss setting up complexes in the Chabahar port SEZ.
Sources in the Iranian government who did not wish to be identified said India’s presence in Chabahar
has rattled a section in the Pakistani establishment. The recent attempt by the Pakistan army to drag
Chabahar in the arrest of an alleged Indian spy during the Iranian president’s visit only proves that the
port project is on track, they said. “It is naive on the Pak army’s part to raise the issue during Iran
President’s visit,” the sources said.
Meanwhile, shipping authorities on both sides are in the final stages of concluding contracts for two
berths and five terminals under an Indian line of credit for the Chabahar port expansion project.
Pradhan’s agenda includes an undersea gas pipeline from Iran to India and the purchase of additional
crude oil from Iran. Pradhan will visit the United Arab Emirates on April 11-12, where the conclusion of
an agreement on a strategic oil reserve in Karnataka is on the cards. Besides, the minister will try to
impress upon the UAE authorities to keep part of the $75 billion fund proposed for investment in India
for the country’s oil sector.
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