‘India must get assertive on Farzad B gas project’

Nayanima Basu Richa Mishra New Delhi | Updated on January 13, 2018

GHOLAMREZA ANSARI Iran’s Ambassador to India. Pic: Kamal Narang

Iranian envoy Gholamreza Ansari says Chabahar port is not exclusive to any one country

Commerce rather than emotions seems to have taken over the bilateral ties between Iran and India, as the two take forward their relations post the sanctions period.

“It is up to India to decide on oil and gas ties…it depends on market, on price and many such elements,” Iran’s Ambassador to India Gholamreza Ansari told BusinessLine. “India once used to be the main customer of Iranian oil,” he said, adding that Indian rice is popular in his country, but Indians should try not to lose the market.

In conversation with BusinessLine, Ansari, spelt out the expectations his country had with India on the Chabahar port and said the project is not exclusive to any one country. Excerpts:

After a significant decline, crude oil imports from Iran are going up again. Does it mean better ties with Indian oil firms?

India used to be a very important customer of Iranian oil. We were a trusted supplier to India. Definitely, we are interested to follow very natural links and hope we will be able to again become the main supplier of oil to India. Of course, it is up to India to decide as it depends on market conditions and price.

The main concern of buyers like India is pricing. Currently, India procures oil from Iran at a discount. Will this dynamics continue?

It depends on the market. I am sure if India has other cheaper options, they will take the price to some extent. But, if a better option is available, you will go for other suppliers. It’s very natural. As the market turns competitive, it brings in many elements on prices. In any circumstances, Indians today prefer to diversify their suppliers. It could be because of geographical or geopolitical issues.

Has the issue of oil dues that India had to pay Iran been resolved? Will there be any new payment mechanism?

As far as the oil dues are concerned, everything is set now. We know how much we should be paid and Indians know how much they should pay. So now we are going on with the new deliveries. There may be, at most, one or two companies whose dues remain. But that also have been set, and we are working on the modalities of payment.

Which are these companies?

Besides the main companies, there were several small ones as well. I do not want to name them. There was some dispute with them with the figures, but now it’s over. The mechanism, I hope, has also been agreed by now. As for the amount, I cannot give any specific figure that has been paid, but both sides are okay about it.

Will the new licensing regime in Iran affect the Farzad B (gas fields) deal? Will you give preference to ONGC Videsh?

The work on Farzad B began before the sanctions, and now we are in the post-sanctions period. We were expecting India to settle the issue before the sanctions; that did not happen. During the sanctions, it was understandable that India did not want to challenge the Americans.

After the sanctions, our expectation was that the procedure will expedite and we will come to a concrete conclusion.

The project was allocated for the Indians and we wanted to continue the discussions on Farzad B, especially when our President (Hassan Rouhani) and your Prime Minister (Narendra Modi) met in Ufa. But of course, the devil is in the details. So we hope now we will be able to soon conclude the talks. But, India should be more assertive.

Will Iran give Indian companies preference in oil/gas block auctions?

The Iranian market is becoming very competitive. This is why we were expecting India — before the sanctions or even during the sanctions — to do something for itself on this project (Farzad B). During the sanctions, especially, there was an exceptionally generous offer from Iran to India. But, as I said, because of the Indian reservations, it did not happen.

However, from the Iranian side, we see this as a project to link Iran and India in the energy business. Our preference is Indians, even our President was supportive. But, when it comes to technicalities, the issue of capabilities and financing comes. So we hope we will be able to do this project with India. A new door of energy will open between Iran and India — gas.

Is Iran-Pakistan-India pipeline (also called Peace Pipeline) a history?

It is 100 per cent up to the Indians to decide. Looking at the project logically, Iran is rich in mineral resource and a very reliable supplier of gas. The distance between India and Iran is 1,000. If you compare with Turkmenistan-Afghanistan-Pakistan, which is an imaginary project, this one is more economical. But when it comes to politics, then it’s something else.

Is Pakistan an issue?

No, I don’t think so — that was a good excuse, but not the main reason. First of all, we support TAPI (Turkmenistan-Afghanistan-Pakistan-India Pipeline). We support any pipeline that runs through this region. IPI was linking Iran, Pakistan and India — this is why it was called the Peace Pipeline. Its main purpose was how we can bring the three countries together. But it did not take off. But we cannot compare the capacities of TAPI and IPI.

What is status of Chabahar port?

We will inaugurate the first phase of Chabahar in the coming weeks. It is supposed to be done in phasses. Our President had also offered your Prime Minister to develop one of the phases. But India preferred a step-by-step approach. So they came and participated in developing the first phase. India is developing a part of it with an investment of $85 million.

The issue in Chabahar was more about expectations. Expectations were much more than what is happening. It was offered to the Indians in 2003 and we are now in 2017. India had announced a $500-million credit-line, out of which $150 million is going to be operational now.

Is Iran looking at China to develop Chabahar?

It is supposed to be an international port. We will be successful if we can have all countries on board, even those such as Turkmenistan, Uzbekistan, Tajikistan and others. We are asking everyone to invest in Chabahar and do business. It is not exclusive to anyone.

What is the status of the Zahedan-Chabahar rail link? Does Iran plan to make it part of the trilateral transit agreement among India, Iran and Afghanistan?

When we inaugurate the first phase of Chabahar, the capacity of the port will increase from 3 million tonnes to almost 6 million tonnes.

IRCON was there recently. We hope they find it feasible because constructing is one issue and financing is another. India is trying to rope in other countries also in this. We welcome that. We hope the discussion proceeds in the very near future.

As regard to the trilateral agreement, yes we do. All governments have approved it. In Iran, we are waiting for the Parliament approval.

When will India and Iran sign the Double Taxation Avoidance Agreement (DTAA)?

We continue to discuss the three main agreements — the Preferential Tariff Agreement, DTAA and the Bilateral Investment Treaty. I hope we soon sign at least the Preferential Tariff Agreement, while we continue to discuss the two others.

Published on February 26, 2017

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