ONGC to Invest $ 5 Billion in Iran’s Farzad B Oil Field

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India’s Oil and Natural Gas Corp (ONGC) has agreed to invest $5bn in the first phase of developing Iran’s Farzad-B gas field, the managing director of Pars Oil and Gas Company (POGC) Ali Akbar Shabanpour said August 24.

NEW DELHI: “In our negotiations last week, attended by the ONGC managing director, the technical and financial differences were greatly reduced,” Mehr news agency reported him saying.

It is expected that a heads of agreement (HOA) would be signed by the seventh Iranian calendar month (September 22-October 21), and negotiations would enter a more executive phase, he added. “Based on preliminary estimates, between $4.5 and $5bn will need to be invested in the development of Farzad-B gas field. However, the exact figure of investment has not been finalized yet,” he explained.

It has been planned that all the required capital will come from the Indian side, he said, adding that defining a finance model will be discussed in the next round of talks. In April, Shabanpour said Iran might decide to develop Farzad B using the new type of contract, the Iran petroleum contract, not the buyback contract which foreign investors found unattractive.

A consortium of ONGC Videsh Ltd (the overseas arm of ONGC), Oil India Ltd and Indian Oil Corp had discovered the 362bn mfield in the Persian Gulf in 2008. India’s oil minister Dharmendra Pradhan said in June that “Iran had in-principle agreed to give the field to India and the price was being discussed,” Financial Express reported.

“We have an October deadline to finalize a contract and are hopeful to do so within the deadline,” he said.

Iran, India’s Gas Authority India and Indian Oil Ltd (IOL) also 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.

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