TEHRAN, Oct 25 (Reuters) - Iran will soon sign a $5 billion contract with a foreign company to develop its offshore Farzad-B gas field, the Oil Ministry’s website SHANA said on Monday.
The report did not name the company, but India’s state-run Oil and Natural Gas Corpration Limited (ONGC.BO) (ONGC) heads a consortium which has exclusive exploration rights for the offshore Farsi block of which the Farzad-B gas field is part.
“Currently negotiation for the investment and development of this oil field in the Persian Gulf is at its final stage,” Mahmoud Zirakchianzadeh, head of the Offshore Oil Co of Iran, was quoted as saying by SHANA.
Zirakchianzadeh said an initial agreement on developing the gas field on a buyback basis had already been signed with the foreign company which has already secured all the necessary permits.
The announcement comes after many Western energy companies have turned away from Iran due to sanctions imposed to pressure Tehran over its nuclear programme.
Iran has often said it has no shortage of willing international partners outside Europe and the United States which have imposed the toughest sanctions.
SHANA reported on Sunday that Venezuela was set to invest $780 million in the development of phase 12 of Iran’s giant South Pars gas field. (CHECK)
ONGC and Indian Oil Corp each own a 40 percent interest in the Farsi block, and Oil India Ltd holds the remainder.
Zirakchianzadeh said the field’s in-place gas reserves have been estimated at 21.7 trillion cubic feet (tcf) of which 12.5 tcf are recoverable. Production is projected at 1.1 cu. ft. per day in the first phase of the field’s development.
Iran is the world’s fifth largest oil exporter and sits on the world’s second largest natural gas reserves after Russia, but sanctions have slowed its development in the oil and gas sector.
The Islamic Republic says it needs around $25 billion a year in oil and gas industry investment to meet its target development goal in oil and gas sectors.