Iran studies India ’s gas proposal

Iran studies India ’s gas proposal

Iran is studying the Indians proposal for development of the Iranian Farzad B offshore gas field, Rokneddin Javadi, the managing director of the National Iranian Oil Company said.

The parties have been negotiating the issue for a long time, Javadi said, adding, recently the Indian side has offered a new proposal which is under study.

Javadi further said that excluding the Farzad B field, no negotiations are underway about the other gas field projects Iran’s Fars news agency reported Sept. 18.

It was the Indian side that halted cooperation with Iran due to sanctions, halting explorations in the gas field, he added.

According to Indian media, India’s ONGC Videsh Ltd (OVL), which is the overseas arm of the state-owned Oil and Natural Gas Corp, has offered a proposal worth $10 billion for development of Iran’s Farzad B offshore gas field.

The Indian company will undertake to develop the Iranian gas field and transfer the gas that it will produce to India, according to the proposal.

In 2008, A consortium of OVL, Oil India Ltd and Indian Oil Corp discovered in the Farsi block Farzad B gas field, which is estimated to contain 12.8 trillion cubic feet of recoverable reserves.

In August 2010, OVL submitted a revised Master Development Plan (MDP) for producing 60 percent of the field’s in-place gas reserves, but did not sign a contract with the Iranian side out of fear it would be exposed to sanctions imposed by the United States on Iran’s energy sector, which did not allow foreign companies to invest more than $ 20 million a year in the country’s energy sector.

After several months of talks, on July 14, Iran and the P5+1 (US, Russia, China, France, UK, and Germany) announced a final accord, curbing Iran ‘s nuclear program in exchange for the lifting of most international sanctions.

In February 2012, Iran issued a one-month ultimatum to the OVL-led consortium to start the development of the field or lose the project, but did not carry out the threat of canceling allocation of the Farsi block to OVL for more than two years.

However, to pressure India to act, Tehran last year put the field on the list of blocks it wants to auction in future, though it did not cancel OVL’s exploration license for the Farsi block which gives it the right to develop the discoveries it has made.

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