ONGC Videsh Ltd (OVL), the overseas investment arm of state-owned Oil and Natural Gas Corp (ONGC), had discovered in 2008 a giant gas field on the Farsi offshore exploration block.
OVL and its partners had offered to invest up to $ 11 billion to develop the discovery, which was later named Farzad-B.
After sitting on OVL’s proposal for years, National Iranian Oil Co (NIOC) informed the company in February this year of its intention to conclude the contract for the development of Farzad-B with an Iranian company, sources with knowledge said. direct from development.
However, OVL continued its commitments to NIOC on field development and sought the terms and conditions of the proposed contract for evaluation, they said, adding that Iran has so far not responded to the Indian firm’s request.
Farzad-B has total reserves of about 21.7 trillion cubic feet of which about 60 percent is recoverable, and production is scheduled for about 1.1 billion cubic feet per day.
Sources said the unconfirmed information suggests that Iran has identified a local company for the development of the field, but OVL has not yet given up hope and continues to pursue Iranian authorities over the contract.
The 3,500-square-kilometer Farsi block sits at a water depth of 20 to 90 meters on the Iranian side of the Persian Gulf.
OVL, with a 40% operating interest, signed the Exploration Service Agreement (ESC) for the block on December 25, 2002. Other partners included Indian Oil Corp (IOC) with a 40% interest and Oil India Ltd ( OIL) with the remaining 20 percent stake.
OVL discovered gas on the block, which was declared commercially viable by NIOC, on August 18, 2008. The ESC exploration phase expired on June 24, 2009.
The firm submitted a Master Development Plan (MDP) for the Farzad-B gas field in April 2011 to Iran offshore oil company (IOOC), the then NIOC designated authority for the development of the Farzad-B gas field.
A development services contract (DSC) for the Farzad-B gas field was negotiated until November 2012, but could not be finalized due to difficult terms and international sanctions against Iran.
In April 2015, negotiations were resumed with the Iranian authorities to develop the Farzad-B gas field under a new Iran Petroleum Contract (IPC). This time, NIOC introduced Pars Oil and Gas Company (POGC) as its representative for the negotiations.
Since April 2016, both parties have negotiated to develop the Farzad-B gas field under an integrated contract that covers upstream and downstream, including the monetization / commercialization of processed gas. However, the negotiations were inconclusive.
Meanwhile, based on new studies, a revised Interim Master Development Plan (PMDP) was submitted to POGC in March 2017, the sources said, adding that in April 2019, NIOC proposed development of the gas field under the DSC and the extraction of crude. gas by NIOC at the point of arrival ashore.
However, due to the imposition of US sanctions on Iran in November 2018, technical studies could not be completed, which is a precursor to trade negotiations.
The Indian consortium has so far invested around $ 400 million in the block.
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