Iran gave a setback to India by giving nod to domestically produce gas from Farzad B gas field

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Iran on 17th May handed over the Farzad B gas field to Petropars, a domestic gas producer.

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Iran gave a setback to India’s energy ties as ONGC Videsh Ltd (OVL) had unearthed the gas field in 2000 and has been part of the continuing cooperation on that front.

The 3,500 square kilometer Farsi block sits in a water depth of 20-90 meters on the Iranian side of the Persian Gulf.

OVL had 40 per cent operatorship interest and signed the Exploration Service Contract (ESC) for the block on December 25, 2002. Other partners that were included were Indian Oil Corp (IOC) with 40 per cent stake and Oil India possessing the remaining 20 per cent stake.

The block discovered by OVL was declared commercially viable by National Iranian Oil Company (NIOC), on August 18, 2008. The exploration phase of the ESC ended on June 24, 2009.

The firm submitted a Master Development Plan (MDP) of Farzad-B gas field in April 2011 to Iranian Offshore Oil Company (IOOC), the then appointed authority by NIOC for the growth of Farzad-B gas field.

A Development Service Contract (DSC) of the Farzad-B gas field was discussed till November 2012, but could not be concluded due to difficult terms and international sanctions on Iran.

Farzad B gas field in the Farsi region was discovered by OVL which is located between the Iranian and Saudi territories. This deal with Petropars was done in Iran despite India’s long-established collaboration regarding the gas field and is indicative of the results of the U.S. sanctions on India-Iran energy cooperation, which had been significantly reduced during the Donald Trump administration in the U.S.

It was indicated by authorities that foreign talks on the Farzad B block had become difficult because of the sanctions. This deal will make a start for daily production of 28 million cu m of gas over five years.