Farzad-B Gas Talks Running Out of Time

A senior energy official said Saturday that Iran is keeping all its options open for tendering the Farzad-B Gas Field because negotiations with India over the drilling rights of the coveted gas project has not produced anything of substance.

“We are in the last round of talks with India's Oil and Natural Gas Corporation over the Farzad-B project and should the two sides fail to come to an agreement, the project will be put out to an international tender,” Mohammad Meshkinfam, managing director of Pars Oil and Gas Company, was quoted as saying by Mehr News Agency on Saturday.

"The most significant difference between POGC and ONGC is that the master plan proposed by ONGC to develop the field is not financially viable," Meshkinfam said. As soon as the two sides agree on a reasonable investment proposal, technical and operational issues can be resolved and the final contract signed, he noted.

On extending the two-month deadline for ONGC to submit a more intriguing master plan, Meshkinfam added that if the deadline is missed yet again, an international tender will be announced for the project.

The first phase of the plan is aimed at producing 57 million cubic meters of natural gas per day from the field off the Persian Gulf.

Moreover, gas output from the field can either be converted into liquefied natural gas by freezing at subzero temperature and shipped in vessels to India or transported through a pipeline passing either overland through Pakistan or the subsea.

Farzad-B is estimated to hold more than 500 billion cubic meters of in-place gas reserves, of which 370 billion cubic meters are recoverable.

According to Oil Minister Bijan Namdar Zanganeh, Tehran has given a final ultimatum to ONGC to come up with a more convincing master plan for the project.

“We will not wait any longer for the Indians and if they fail to offer a sound financial proposal, we will change our mind,” Zanganeh said last month.

  Indian Discovery

A consortium of ONGC, Oil India and Indian Oil Corporation discovered huge amounts of gas reserves in the Farsi Block in 2008. The discovery was later named Farzad-B.

However, the consortium could not obtain the permission to develop the field due to tighter international sanctions imposed on Iran due to nuclear program dispute.

India has been pushing for the development rights of Farzad-B after Iran and the six world powers (the five permanent members of the United Nations Security Council plus Germany) reached an accord in July last year on temporarily limiting Tehran's nuclear program in exchange for sanctions relief.

As a gesture of goodwill, Iran has excluded Farzad-B from a list of several dozen oil and gas projects that it plans to put to tender under a new model of contracts, dubbed as the Iran Petroleum Contracts.