Iran offers 30 per cent interest to Indian firm in Persian Gulf gas field

Iran has offered ONGC Videsh Ltd and its partners a 30 per cent interest in the development of the Farzad-B gas field in the Persian Gulf that was discovered by the Indian consortium, officials said.

ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corporation (ONGC), in 2008 had discovered a giant gas field in the 3,500 square kilometres Farsi offshore block, according to Telegraph India.

In April 2011, it submitted a master development plan to bring the discovery, which was named Farzad-B, for production but negotiations got stalled as international sanctions were slapped on Iran over its nuclear plans.

Negotiations restarted in 2015, but in February 2020, the National Iranian Oil Company (NIOC) informed that the Iranian government had decided to award the contract to develop the field to a local firm.

The officials said the exploration contract under which OVL and its partners had discovered gas reserves in the Farsi block provided for the discoverer to be part of the field development.

Citing the exploration service contract, Iran asked the Indian consortium to exercise its rights to participate in the development contract up to a minimum 30 per cent stake, they said, adding Tehran asked the Indian firms to exercise the right within 90 days failing which it would be deemed as a rejection of the offer.

Officials said for further discussion to participate in the development contract, communications and comments on the confidentiality agreement (CA) were sent to NIOC in March and a reminder in the following month.

However, NIOC has not responded to that, they said. OVL holds a 40 per cent stake in the 3,500sqkm Farsi offshore exploration block in the Persian Gulf of Iran. Indian Oil Corp (IOC) holds a 40 per cent stake and the remaining 20 per cent is with Oil India.

The exploration contract was signed on December 25, 2002, and in 2008, OVL made a giant discovery, later rechristened as Farzad-B.

The field holds 23 trillion cubic feet of in-place gas reserves, of which about 60 per cent is recoverable. It also holds gas condensates of about 5,000 barrels per billion cubic feet.