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EghtesadOnline: Talks to develop Farzad B gas field in the Persian Gulf are underway between Iran and India, but no decision has yet been taken, India’s outgoing ambassador to Tehran Saurabh Kumar said Wednesday.

Reports say Gaddam Dharmendra will replace Kumar soon.

“It is not possible to determine the exact time when production will start in this field as the talks have not produced the desired results,” ILNA quoted the envoy as saying.

New Delhi and Tehran are trying to narrow differences over investments and the gas price from Farzad B field since its discovery by Indian companies led by ONGC Videsh Ltd, the foreign investment arm of India’s Oil and Natural Gas Corp, in 2008, according to Financial Tribune.

In the master development plan OVL submitted to Iran last year, it estimated the upstream part to cost $6.2 billion while another $5 billion will be required to build a liquefied natural gas export facility. 

However, the proposition was considered very expensive and the Indian company agreed to only implement the upstream part of the field.

While Iran says the upstream investment should not be more than $5.5 billion, it wanted India to buy all the natural gas produced from the Persian Gulf block at a price equivalent to the rate Qatar charges for its LNG export to India under a long-term deal ($7 per million British thermal unit). The rate Iran demanded then was triple the $2.3 per mbtu rate OVL was willing to pay.

“I regret that we did not move forward on the Farzad B field project as we should have. Although it took a lot of time, it did not proceed as expected,” Kumar rued.

Regarding oil imports from Iran, he said, “we are keen on importing Iranian oil after the end of 180-day exemption, but we should wait and see what happens”. 

India, the second biggest buyer of Iranian oil, won an exemption from US sanctions, re-imposed on Iran oil exports in November, as it has agreed to cut imports. Under the six-month exemption, Indian companies are allowed to import a maximum of 300,000 barrels a day of crude oil.

 

Iran India Persian Gulf Gas field Farzad B Saurabh Kumar