Iran offers Indian firms 30 pc stake in gas field

In April 2011, he presented a Master Development Plan (MDP) to bring the discovery called Farzad-B into production, but negotiations stalled when international sanctions were imposed on Iran over its nuclear plans. Negotiations resumed in 2015, but in February 2020, the National Iran Oil Company (NIOC) reported that the Iranian government had decided to award the contract to develop the field to a local company.

The exploration contract, under which OVL and its partners discovered gas reserves in the Farsi block, called for the discoverer to be involved in the development of the field, officials said. Citing the exploration services contract, Iran asked the Indian consortium to exercise its rights to participate in the development contract up to a minimum stake of 30 percent, they said, adding that Tehran has asked the Indian companies to exercise the right within 90 days otherwise it would be deemed a rejection of the offer. Officials said further discussions were needed to participate in the development.

The contract, notices and comments on the Confidentiality Agreement (CA) were sent to NIOC in March and reminded of them the following month.

However, NIOC has not responded, they said. OVL has a 40 percent interest in the 3,500 square kilometer Farsi offshore exploration block in the Iranian Persian Gulf. Indian Oil Corp (IOC) owns a 40 percent stake and the remaining 20 percent is held by Oil India Ltd (OIL). The Exploration Services Agreement (ESC) for the block was signed on December 25, 2002 and OVL made a major discovery in 2008 on the block later renamed Farzad-B. .The field contains 23 trillion cubic feet of in situ gas reserves, approximately 60% of which are recoverable.

                                                        

It also contains gas condensates from about 5,000 barrels per billion cubic feet of gas. The Indian consortium submitted a Master Development Plan (MDP) for the Farzad-B gas field to the Iranian Offshore Oil Company (IOOC), the then-designated NIOC authority for the development of the Farzad-B gas field, in April 2011. By November 2012, a Development Services Contract (DSC) for the Farzad-B gas field was being negotiated, but it could not be finalized due to difficult conditions and international sanctions against Iran.

In April 2015, negotiations with the Iranian authorities to develop the Farzad-B gas field were resumed 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 been negotiating the development of the Farzad B gas field under an integrated contract covering upstream and downstream including monetization/commercialization. of the processed gas. However, the negotiations remained unsuccessful. In 2016, Iran said it was considering the Indian proposal, but an agreement was unlikely due to the difference between the gas price

Iran was asking and the Indian bid of India offered 6 USD. 2 billion development plan and a gas price of approximately $4 per million UK thermal units for Farzad-B in 2018.

Meanwhile, based on new studies, a revised preliminary development master plan (PMDP) was submitted to POGC in March 2017, officials said, adding that in April 2019 NIOC proposed development of the gas field under the DSC and DSC the extraction of raw gas by NIOC at the landfall. However, due to the imposition of US sanctions on Iran in November 2018, no technical studies, which are a preliminary stage to trade negotiations, could be completed. In February 2020, NIOC announced its intention to finalize the

Farzad-B development contract with an Iranian company. In March 2021, it notified the Indian consortium of signing the development contract with Petropars, a local Iranian company. So far, the Indian consortium has invested around US$85 million in the block.

The contract stipulates that the Indian consortium will reimburse the costs together with a fixed rate of return.