The Oil and Natural Gas Corporation of India (ONGC) is India’s largest oil exploration and production firm. It is a government-owned company and the Union Ministry of Petroleum and Natural Gas. ONGC operates land and offshore rigs, in addition to conducting exploratory work on potential oil and natural gas fields. After Iran awarded a contract for developing the giant gas field to a local firm, ONGC Videsh Ltd. discovered the Farzad-B gas field in the Persian Gulf. In the presence of the Iranian Minister of Petroleum, Bijan Zangeneh, the National Iranian Oil Company (NIOC) signed a contract worth USD 1.78 billion with Petropars Group for the construction of the Farzad B Gas Field in the Persian Gulf.
There are 23 trillion cubic feet of in-place gas reserves in the region, with around 60% of them recoverable. It also has around 5,000 barrels per billion cubic feet of gas condensates. The five-year buyback deal envisions regular output of 28 million cubic meters of sour gas. The state-owned Oil and Natural Gas Corporation’s (ONGC) overseas investment arm, ONGC Videsh Ltd (OVL), discovered a large gas field in the Farsi offshore exploration block.
OVL and its partners had offered to invest up to USD 11 billion in the creation of the discovery, later called Farzad-B., OVL has an intention to conclude the Farzad-B development contract with an Iranian corporation, implying that the Indian firm’s bid had been rejected. It sat on OVL’s investment proposal for years after that. On the Iranian side of the Persian Gulf, the 3,500 square kilometer Farsi block is located in water depths of 20-90 meters.
“OVL signed the Exploration Service Contract (ESC) for the block on December 25, 2002, with a 40% operatorship stake. Other partners included Indian Oil Corp (IOC), which owns 40% of the company, and Oil India, which owns the remaining 20%. On August 18, 2008, OVL discovered gas in the block, which NIOC declared commercially viable. The ESC’s exploration process ended on June 24, 2009. In April 2011, the company submitted a Master Development Plan (MDP) for the Farzad-B gas field to the Iranian Offshore Oil Company (IOOC), which was then NIOC’s designated authority for the development of the Farzad-B gas field”, said Subash Kumar, Managing Director of ONGC.
“Under a new Iran Petroleum Contract, with Iranian authorities to expand the Farzad-B gas field have resumed (IPC). Both sides negotiated to grow the Farzad-B gas field under an integrated contract covering upstream and downstream, including monetization/marketing of the processed gas. This time, NIOC introduced Pars Oil and Gas Company (POGC) as its agent for negotiations, and both sides negotiated to develop the Farzad-B gas field under an integrated contract covering upstream and downstream, including monetization/marketing of the processed gas. Negotiations, however, remained inconclusive”, added Subash Kumar.
Due to the implementation of the US sanctions on Iran in November 2018, technical studies which are a prerequisite for commercial negotiations were unable to be completed. The Indian consortium has put about $400 million into the block so far, due to difficult terms and international sanctions against Iran.
