Oil Minister Bijan Namdar Zanganeh said Tuesday the National Iranian Oil Company has invited the Indian consortium led by ONGC Videsh Ltd (OVL) to negotiate for the last time on the development of Farzad-B Gas Field in the Persian Gulf.
"OVL, the foreign investment arm of India’s Oil and Natural Gas Corp. has yet not responded to the invitation. We are waiting… if they do not come domestic firms will take over," Zanganeh was quoted as saying by ISNA.
According to the minister, NIOC is drawing up a new economic development plan and is ready to sign a deal that has been on hold for years. He did not provide details but said there are no problems regarding technicalities.
"The Indian company is our first priority. But if they are reluctant, NIOC will give the job to domestic companies."
About the possibility of collaboration with local firms, NIOC has said the energy company, Petropars Ltd., is jointly conducting feasibility studies to develop the field with the help of a foreign partner. The foreign firm has not been named.
Farzad-B is estimated to hold more than 500 billion cubic meters of in-place gas reserves, of which 370 bcm are recoverable.
Elaborating the point, the minister said, "ONGC should take a final decision," adding that Tehran and New Delhi have been trying to narrow differences over investments and the price of gas.
Ministerial Talks
Talks are underway to resolve differences between the sides. Foreign Minister Mohammed Javad Zarif visited New Delhi earlier in the month and conferred with his Indian counterpart Sushma Swaraj on issues of mutual interest, including the long-delayed mega gas project.
“Indians had the opportunity of getting the Farzad-B venture earlier and still do," Gholamreza Ansari, deputy minister for economic affairs at the Foreign Ministry, told Business Standard in January. He later suggested that Iran was willing to sweeten the terms for India if and when negotiations make progress.
According to senior officials from OVL, the deal was expected to be signed last September but got postponed after a European consultant firm and an Australian consultant company withdrew from their contracts.
Another concern was also raised by State Bank of India that had exposure to several OVL projects.
“OVL’s investments in Brazil and Sudan were run from our Amsterdam office and SBI has major exposure to it. We were told those investments might also get affected if we go ahead with the Farzad deal at a time when the US has imposed sanctions," an OVL official said, referring to the new oil and banking restrictions imposed by the United States on Iran after President Donald Trump last May abandoned a 2015 nuclear deal Iran had signed with the six world powers (five permanent members of the UN Security Council plus Germany).
