India eyes Farzad B Gas, Iran Wants Re-injection
Two months after Iran and India took up cudgels in a dispute over the Farzad B gas field discovered by India’s Oil and Natural Gas Corp (ONGC) in 2008 in the Persian Gulf, India has punished Iran. it is cutting oil imports by 20% and starting negotiations on oil and gas projects with Israel.
Iran has responded, saying it is talking with Russian Gazprom on developing that project and studying the re-injection of the produced gas into oil fields to maintain output.
The director of integrated planning at national Iranian oil company Karim Zobeidi said September 4 that Iran has not cut negotiations with India over the gas field, but it is also negotiating with Gazprom; and local company Petro Pars is studying the injection of dry gas produced from the Farzad A and B phases into the Aghajari oil field.
Aghajari has been operating for more than 70 years with 26.6bn barrels of oil in-situ, of which about 10bn barrels remain. Iran re-injected more than 10bn m³ into the field last year. The field’s production has fallen from 1mn b/d to 0.3mn b/d over the last 50 years and needs more gas re-injection, Iran says.
Farzad B which has 540bn m³ reserves was discovered by ONGC and the consortium, which includes Indian Oil Corp and Oil India, has been trying to secure development rights to the Farzad B gas field since at least 2009.
The former CEO of Pars Oil and Gas Company (POGC) Ali Akbar Shabanpour said in August last year that India has agreed to invest $5bn in the first phase of developing Iran’s Farzad B gas field, aimed to produce 28-30mn m³/d and the volume would double in the second phase.
“It is expected that a heads of agreement (HOA) would be signed by October 2016, and negotiations would enter a more executive phase. It has been planned that all the required capital will come from the Indian side.” Developing the Farzad A and B fields will cost around $9bn in total.
Iran and India started negotiations in March 2016 over building a $4.5bn subsea pipeline to transit 31.5mn m³/d of gas from Iran’s southeastern port of Chabahar port to India’s western Gujarat State as well.
However, in July India said that it gave an $11-bn “best offer” to develop Farzad B and to build the infrastructure to export the fuel as long as Iran guarantees a “reasonable return” on the project. ONGC has offered building a liquefied natural gas export facility instead of a gas pipeline.
Zobeidi said that based on India's proposed plan, Iran would receive only 10% of the profit from the gas compared with India's 90%, state-run Shana reported September 4.
India's energy minister said that the country’s state-run refineries would cut their Iranian oil intake by a quarter in the current fiscal year, which began April 1. India imported about 414,900 b/d Iranian oil in July, about 20.7% less than July 2016 and 16.3% less than the previous month.
On the other hand, India’s oil minister told Reuters September 4 that ONGC plans to bid for Israeli offshore oil-and-gas exploration blocks, the first major deal between the two countries since a groundbreaking trip by the prime minister Narendra Modi in July.
Dalga Khatinoglu