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Iran reassures India over development rights of gas field
August 12, 2015 / 1:04 PM / 2 years ago

Iran reassures India over development rights of gas field

NEW DELHI (Reuters) - Iran has said the development rights for its Farzad-B gas field will be available to Indian companies after concerns in New Delhi that cash-rich European firms could clinch the contract.

A consortium headed by ONGC Videsh, the overseas investment arm of Oil and Natural Gas Corp, in 2008 discovered the Farzad-B gas field in the Farsi offshore block.

The consortium, which also include Oil India and Indian Oil Corp, has been seeking development rights for the field.

An Indian delegation that went to Iran in the last week of July was told Tehran was working out a new production sharing contract, said B. Roy, head of business development at Oil India Ltd..

“The outlook is upbeat,” he said.

Iran has asked Indian firms to submit a development plan for the Farzad-B gas field, Roy said, adding Tehran had offered a draft contract, known as the Iran Petroleum Contract (IPC), to Indian companies.

The new contract for the block is a mix of production sharing and service contract, he said.

The delegation also renewed talks over the purchase of Iranian liquefied natural gas (LNG) once sanctions against the country are lifted and Tehran sets up a liquefaction facility, Indian Oil Minister Dharmendra Pradhan told lawmakers on Wednesday.

India signed a deal with Iran in 2005 to buy 5 million tonnes a year of LNG but the contract was never implemented.

Separately, Oil India said the first delivery of LNG cargo from Mozambique’s offshore Area 1 Block in the Rovuma basis was expected in the first quarter of 2020.

“There is a delay of 7-8 months in LNG supplies from Mozambique, as their parliament only recently passed the law supporting development of (an) LNG hub,” Roy said.

He said Mozambique’s Area 1-operator Anadarko Petroleum had signed initial deals with Japan, South Korea and Singapore-based entities to sell 60 percent of the gas to be produced from the phase 1 of the project.

Reuters last month reported that Anadarko was in talks with Japanese joint-venture vehicle Jera, set to become the world’s biggest buyer of LNG, to sell long-term supply from its Mozambique export scheme.

Roy said banks had committed $16 billion for the project that would cost about $23 billion.

“The financial closure for the project is expected by the end of this year or early next year,” he said.

The project also include setting up two LNG trains of an annual capacity of 6 million tonnes each.

Reporting by Nidhi Verma; Editing by Mark Potter

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