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ONGC Videsh Ltd (OVL), the overseas arm of State-run Oil and Natural Gas Corporation, has said interests in Iran’s discovered Farsi offshore block, now named Binaloud, are still alive.
Stating that OVL has not heard anything from the West Asian nation that suggests that India is out of race as far as the discovery in the block is concerned, Narendra K Verma, Managing Director and CEO of OVL, said: “We have been interacting with Iranian authorities… negotiations are not yet concluded.”
Reports suggested that to put pressure on India to invest in the gas field, Iran has put the Farzad-B gas field on a list of fields it plans to auction.
The reason cited is delay on part of India in its development.
The discovery was made by OVL and its Indian partners in 2008.
OVL is keen to develop the Farzad-B gas find, which is estimated to hold in-place reserves of up to 21.68 trillion cubic feet (Tcf), of which 12.8 Tcf of gas and 212 million barrels of condensate may be recoverable.
Production sharing contract Both India and Iran have been working on the contract.
India had started exploration work as a service contractor, but now it prefers a production sharing contract before going for development.
As a service contractor, the company does not have claim on the discovery, while, if it enters into a production sharing contract, it acquires equity in the block and has share on the find.
The previous Government in Iran had agreed on a production sharing contract, but the new Government had fresh ideas.
OVL is now in discussions with the new elected Government that is working on a model contract or any other mechanism for all fields, including Farzad-B.
OVL’s Verma, however, said: “We are watching the international scenario keenly and will take a decision accordingly.”
In August-September 2010, Indian firms had submitted a revised master development plan for producing 60 per cent of the 21.68 Tcf in-place gas reserves, but had not signed the contract because of western sanctions.
In 2012, Iran had issued a one-month ultimatum to the Indian consortium over the development of a gas field.
But neither Iran has cancelled the allocation, nor India has moved any commitment.
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