India gives Iran $11-billion offer on Farzad-B field

03 Jul 2017- An Indian consortium is willing to spend as much as $11 billion to develop a giant Iranian natural gas field and build the infrastructure to export the fuel as long as the Persian Gulf nation guarantees a 'reasonable return' on the project, according to the company leading the group.

In a Bloomberg report, ONGC Videsh Ltd. has offered to invest as much as $6 billion on the Farzad-B field and spend the remaining amount to build a liquefied natural gas export facility, according to Narendra Kumar Verma, the managing director of the overseas investment unit of India's largest explorer, Oil and Natural Gas Corp. (ONGC).

The group is seeking a return of about 18 percent, and Indian companies are willing to buy all the gas exported from the project, Verma said.

"We have given our best offer to them. Now, it is up to them to agree or not agree," Verma said in a phone interview. "We have told the Iranian authorities very clearly that some basic returns are necessary."

As India, the world's fourth-largest LNG buyer, seeks to lock up gas resources to meet growing demand and spur the use of cleaner-burning fuels, Iran is emerging from sanctions that stifled investment in its energy sector.

Iran's Deputy Oil Minister Amirhossein Zamani-Nia said last month discussions with the Indian side on Farzad-B were continuing and have "very much advanced". Iran was also in discussions with Russia's Gazprom PJSC on Farzad fields, he said.

The two countries had aimed to conclude a deal by February on developing the field, which India has said holds reserves of almost 19 tcf. The consortium, which includes Indian Oil Corp. and Oil India Ltd., has been trying to secure development rights to the Farzad-B gas field since at least 2009.

The delay over a final outcome has started hurting oil trade between the two countries. India has recently reduced purchases, leading to the withdrawal by Iran of some benefits on sales in retaliation, Bloomberg reported in April.

"We are ready to invest," Verma said. "Ultimately, that's positive for them."

The South Asian nation is promoting the cleaner-burning fuel to curb the use of more polluting alternatives such as coal and petroleum coke, an oil-refining byproduct, to meet its pledge of slashing emissions by a third by 2030.

ONGC Videsh and Indian Oil each own 40 percent interest in the Farsi block that holds Farzad-B field, while Oil India has a 20-percent stake.

source: http://www.iran-daily.com/News/195958.html