India gives Iran $11-billion "best offer" on Farzad-B field

Wednesday, July 5, 2017


An Indian consortium is willing to spend as much as $11 billion to develop a giant Iranian natural gas field and build the infrastructure to export the fuel as long as the Persian Gulf nation guarantees a “reasonable return” on the project, according to the company leading the group.

ONGC Videsh Ltd. has offered to invest as much as $6 billion on the Farzad-B field and spend the remaining amount to build a liquefied natural gas export facility, according to Narendra Kumar Verma, managing director of the overseas investment unit of India’s largest explorer, Oil & Natural Gas Corp.

The group is seeking a return of about 18%, and Indian companies are willing to buy all the gas exported from the project,” Verma said in a phone interview with Bloomberg.

We have given our best offer to them. Now, it is up to them to agree or not agree. We have told the Iranian authorities very clearly that some basic returns are necessary,” he added.

As India, the world’s fourth-largest LNG buyer, seeks to lock up gas resources to meet growing demand and spur the use of cleaner-burning fuels, Iran is emerging from sanctions that stifled investment in its energy sector.

Iran on Monday signed a formal contract with Total SA and China National Petroleum Corp. to develop its share of the offshore South Pars project, the world’s biggest natural gas field.

Iranian Deputy Oil Minister Amir Hossein Zamaninia said last month discussions with the Indian side on Farzad-B were continuing and have “very much advanced.” Iran was also in discussions with Russia’s Gazprom PJSC on the Farzad fields, he said.

The two countries had aimed to conclude a deal by February on developing the field, which India has said holds reserves of almost 19 Tcf. The consortium, which includes Indian Oil Corp. and Oil India Ltd., has been trying to secure development rights to the Farzad-B gas field since at least 2009.

The delay over a final outcome has started hurting oil trade between the two countries. India, which bought Iranian crude even during the years of U.S.-led sanctions against Tehran, has recently reduced purchases.

We are ready to invest,” Verma said. “Ultimately, that’s positive for them.”



*Source: ISNA

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