Top managers from India's Oil and Natural Gas Corporation Videsh Limited, Oil India and Indian Oil Corporation are due to visit Tehran this week to submit and finalize their financial proposal for the development of the sought-after Farzad-B Gas Field, managing director of Pars Oil and Gas Company said on Monday.
"This round of negotiation will revolve around investment plans and the two sides' share from the massive joint natural gas field with Saudi Arabia. Moreover, we hope a preliminary agreement can be concluded by September," Ali Akbar Shabanpour was also quoted as saying by Mehr News Agency.
Pointing to substantial Saudi investment in the field, Shabanpour added that the state-owned National Iranian Oil Company has yet to reach a decision about the financial viability of the mega project in the Persian Gulf.
According to Shabanpour, if negotiations on financial model fail, the Oil Ministry will decide whether to continue protracted talks with the Indian company.
The official ruled out any serious disagreement with India over Farzad-B that was discovered by Indians eight years ago, but stressed that their cooperation in developing the field should be renegotiated as the previous contract and feasibility studies of the field’s development were based on higher oil prices.
“But with the fall in oil prices, the Indian company should again study the viability of the project and offer a new financial plan, which will ultimately be approved by the Oil Ministry,” he added.
According to reports, India is close to securing development rights to develop Farzad-B and as a further sign of interest in working with Indians in Farzad-B project, Iran did not list the gas field among the 52 oil and natural gas projects introduced to international companies in a major conference in Tehran in 2015.
Oil Minister Bijan Namdar Zanganeh described Farzad-B last year as the only Iranian project "promised" to a foreign contractor.
A consortium of OVL, Oil India and Indian Oil Corporation discovered huge amount 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 international sanctions against Iran’s nuclear program. Gas output from the field can either be converted into liquefied natural gas by freezing at subzero temperature and shipping in cryogenic ships to India or transported through a pipeline passing either overland through Pakistan or subsea.
Farzad-B Gas Field holds an estimated 508 billion cubic meters of in-place reserves, of which 370 bcm can be recovered.
