India loses Farzad-B gas field discovered by ONGC in Iran
India lost the Farzad-B gas field discovered by ONGC Videsh Ltd in the Persian Gulf on Monday after Iran awarded a contract for the development of the giant gas field to a local company.
“The National Iranian Oil Company (NIOC) has signed a contract worth $ 1.78 billion with Petropars Group for the development of the Farzad B gas field in the Persian Gulf,” the official press service reported. Iranian Ministry of Petroleum, Shana. “The agreement was signed on Monday May 17th at a ceremony attended by Iranian Oil Minister Bijan Zangeneh in Tehran.”
The field contains 23 trillion cubic feet of in-place gas reserves, of which approximately 60% is recoverable. It also contains gas condensate of about 5,000 barrels per billion cubic feet of gas.
The buyback agreement signed on Monday provides for the daily production of 28 million cubic meters of sour gas over five years, Shana said.
ONGC Videsh Ltd (OVL), the overseas investment arm of state-owned Oil and Natural Gas Corp (ONGC), discovered in 2008 a giant gas field in the Farsi offshore exploration block.
OVL and its partners had offered to invest up to $ 11 billion for the development of the discovery, which was later dubbed Farzad-B.
On October 18, 2020, PTI reported that NIOC informed OVL of its intention to enter into the Farzad-B development contract with an Iranian company, in an apparent rejection of the Indian company’s offer.
After that, he sat on the OVL investment proposal for years.
The 3,500 square kilometer Farsi block lies in a water depth of 20 to 90 meters on the Iranian side of the Persian Gulf.
OVL, holding 40% of the operator’s stake, signed the exploration service contract (ESC) for the block on December 25, 2002. Other partners included Indian Oil Corp (IOC) with 40% stake and Oil India holding the remaining 20%.
OVL discovered gas in the block, which was declared commercially viable by NIOC, on August 18, 2008. The exploration phase of the ESC expired on June 24, 2009.
The company submitted a Master Development Plan (CDM) for the Farzad-B gas field in April 2011 to the Iranian Offshore Oil Company (IOOC), then the NIOC-appointed authority for the development of the Farzad-B gas field.
A development service contract (DSC) for the Farzad-B gas field was negotiated until November 2012, but could not be finalized due to difficult conditions and international sanctions against Iran.
In April 2015, negotiations resumed with the Iranian authorities to develop the Farzad-B gas field under a new Iranian oil contract (IPC). This time, NIOC introduced Pars Oil and Gas Company (POGC) as its representative for the negotiations.
From April 2016, the two parties negotiated to develop the Farzad-B gas field as part of an integrated contract covering upstream and downstream, including the monetization / marketing of the processed gas. However, the negotiations were unsuccessful.
Meanwhile, based on new studies, a revised Interim Development Master Plan (PMDP) was submitted to POGC in March 2017, sources said, adding that in April 2019, NIOC proposed the development of the field. of gas under the DSC and the raw gas sampling. by NIOC at the landing point.
However, due to the imposition of US sanctions on Iran in November 2018, the technical studies could not be concluded, which is a precursor to trade negotiations.
The Indian consortium has so far invested around $ 400 million in the block.
(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)