State-owned ONGC Videsh Ltd (OVL) lost development rights for the Farzad-B giant gas field in Iran to Iranian Petropars Group. OVL owns 40 per cent participating interest (PI) in the block in which gas discovery was first made by a consortium led by ONGC.
Indian Oil Corporation too owns 40 per cent of PI, with Oil India holding the remaining 20 per cent PI in the block. Issues in negotiations between OVL and Iranian authorities as well as US sanctions led to the failure of multiple negotiations between the company and Iranian regulators to finalise a development plan.
“The National Iranian Oil Company (NIOC) has signed a contract worth $1.78 billion with Petropars Group for the development of Farzad-B Gas Field in the Persian Gulf,” the Iranian Oil Ministry’s official news service Shana reported.
The gas field, which has in-place reserves of about 651 billion cubic metres of gas reserves, is expected to record about 28 million metric standard cubic meters per day (MMSCMD) of production within five years. India’s total gas consumption in FY21 was about 166 MMSCMD.
Sources told The Indian Express that Tehran had told India in January 2020 that it would develop the Farzad-B Gas field on its own. It had, however, kept the door open for India to join later.