ONGC May Bid for Iran's Farzad Gas Field Under New Deal

India’s ONGC may look to develop Iran’s Farzad B gas field under Tehran proposed new deal on hydrocarbon exploration, Businessline newspaper reported Monday.

OVL, the overseas arm of state owned ONGC, along with its Indian partners Indian Oil Corporation and Oil India, had made the Farsi discovery in 2008.

The Indian firm is keen to develop the Farzad-B gas find, which is now open to international competition, because of the estimated in-place reserves of 21.68 trillion cubic feet (tcf), of which 12.8 tcf of gas and 212 million barrels of condensate may be recoverable, Businessline reported.

“We will be comfortable working under the proposed Iranian Petroleum Contract. Commercial discussions are going on. We have to wait till the contract model is finalised and formally announced by Iran,” Narendra K Verma, Managing Director, OVL, told the newspaper.

OVL and team had started exploration work as a service contractor but, under Iran’s old rule, this did not give them any claim on the discovery.

Oil industry sources told Businessline that, under Tehran’s new model — Integrated (or Iranian) Petroleum Contract — an international oil company can participate in all segments of the upstream business — exploration, development, and production. While the international oil company will help manage the projects, it will not have ownership of the reserves. But the company will be paid a share of the project's revenue in instalments once production starts, the sources said.