The Hindu Business Line : ONGC Videsh hopes to pick up stake in Iran’s Yadavaran field

The agreement
OVL and Iran’s NIOC had entered an agreement in 2005 wherein the Indian company was to get 5 mt of LNG, 10 per cent stake in Yadavaran field, and a 100 per cent stake in another field Jufeyr or alternatively 20 per cent stake in Yadavaran.

Richa Mishra

New Delhi, Dec. 12 ONGC Videsh Ltd (OVL) is hopeful of receiving an offer from Iran for a stake in Yadavaran oil and gas field on the back of an agreement inked between Iran and China’s Sinopec for development of the field.

According to an understanding between OVL and the National Iranian Oil Company (NIOC), only after an agreement with China was finalised would Iran make an offer to the Indian company. Besides, India’s participation in the field is linked to the liquefied natural gas (LNG) deal with Iran.

Mr R.S. Butola, Managing Director, OVL, said, “It was always understood that the Chinese firm will get the operatorship as well as a higher stake in the field. Only after the terms with China were formalised, an offer would be made to us. And we hope that we will now receive an offer from Iran.”

Official sources told Business Line, “Iran’s agreement with Sinopec does not mean that our chances have closed. We have not received any formal communication from Iran stating that the deal for India is dead.” As per reports, Iran has entered an agreement with Sinopec for the development of the field and supply of 10 million tonnes (mt) of liquefied natural gas (LNG) per annum for 25 years.

OVL and Iran’s NIOC had entered an agreement in 2005 wherein the Indian company was to get 5 mt of LNG, 10 per cent stake in Yadavaran field, and a 100 per cent stake in another field Jufeyr or alternatively 20 per cent stake in Yadavaran.

“We hope to get an offer of 20 per cent stake in Yadavaran, as Jufeyr field has been given to a Belarus company,” sources said, adding that “however, OVL’s participation depends on the LNG gas deal with Iran.”

LNG roadblock

Iran has been claiming that the LNG deal with India has hit a roadblock due to divergent understanding of the provisions in the contract between the two countries. The Oil Minister of Iran, Mr Gholamhossein Nozari, had said, “I think there was a misunderstanding on the procedure followed for approval of such deals. The contract had not got the approval of the NIOC’s Board.”

Meanwhile, pursuing other opportunities in Iran, OVL has recently joined hands with the Hinduja Group for two projects. “The understanding with the Hindujas is specifically for Iran’s onshore Azadegan oil field and the South Pars Phase 12 gas asset. There is no obligation on either side (OVL and Hindujas) to go for other projects together.”

OVL also has an understanding with Iran’s Petropars to explore opportunities in third countries.

Related Stories:
OVL seeks 20% stake in Iran oil field
Iranian field: ONGC may get stake on same terms as China's Sinopec

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