Indian OVL Working on a New Farzad Field Plan

ONGC Videsh (OVL), the overseas arm of state-owned ONGC, is reportedly working on the $6.2bn cost of developing the Farzad-B gas offshore Iran, news agency Press Trust of India reported February 18.

Farzad B which has 540bn m³ reserves was discovered by a consortium consisting OVL, Indian Oil Corporation and Oil India. It has been trying to secure development rights to the Farzad B gas field since at least 2009.

Sources have told Press Trust of India that OVL last year made an offer to invest $11bn in developing the Farzad-B field as well as building the infrastructure to export the gas but Iran has been reluctant to award the rights of the field to the Indian firm owing to differences over price of the gas.

The news agency added that, with deal on the verge of falling apart, OVL has offered do just the upstream part of bringing the field to production while leaving the marketing of the fuel to Iran. Sources told Press Trust of India that upstream part will cost $6.2bn while another $5bn will be needed to build the LNG facility. Iran believes the upstream investment should not be more than $5.5bn, Press Trust of India reported.

Indian oil minister Dharmendra Pradhan met with his Iranian counterpart Bijan Zangeneh February 17 in New Delhi and discussed issues related to cooperation between the two countries in the field of oil and natural gas. Zangeneh was accompanying Iranian president Hassan Rouhani on a three day trip to India.

Pradhan's twitter feed said he had “met Iran’s petroleum minister Mr. Bijan Zangeneh and his team of delegates. Discussed on the progress of issues of mutual interest in oil and gas sector. India can immensely benefit from the abundant oil, gas and energy resources of Iran."