The latest setback for India is the agreement between Iran and Chinese Sinopec for the Yadavaran oil and gas field. This effectively pushes out ONGC Videsh - the government's overseas acquisition vehicle - which had shown an interest in the field. | ||||||||||||||||||||||
Iran's agreement with Sinopec for the development of the field and supply of 10 million tonnes (mt) of liquefied natural gas (LNG) a year for 25 years, nullifies the memorandum of understanding that Iran had entered into with OVL in 2005. | ||||||||||||||||||||||
This promised the company three things: 5 mt of LNG, 10 per cent stake in Yadavaran field and 100 per cent stake in another field called Jufeyr.
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"The agreement between Iran and Sinopec practically erases any chance that OVL had in picking up a stake in the Yadavaran field. The Jufeyr field was anyway given away to a Belarus company previously. And the LNG import deal never worked out," said a source close to the development. | ||||||||||||||||||||||
"The 2005 MoU is dead," another government official said. OVL had earlier this year submitted a development plan for the Yadavaran field to Pedec, a subsidiary of the National Iranian Oil Company (NIOC). A senior ONGC executive said that the Yadavaran agreement cannot be considered "dead" as the necessary papers on the project had already been filed. | ||||||||||||||||||||||
Industry officials however feel that India is in a kind of go-slow on deals with Iran, because of the failed LNG deal. Besides, the supply of gas from Iran's South Pars field to India via a pipeline through Pakistan is not moving forward. "India is cautious on deals with Iran," said a senior official of the petroleum ministry. | ||||||||||||||||||||||
Opposition from the US to the pipeline, following Iran's nuclear policy, is considered to be a major stumbling block. Iranian officials had told Business Standard earlier this year that if India did not move faster on the $7 billion gas pipeline deal, Iran would consider selling its gas to China. | ||||||||||||||||||||||
Indian oil companies are working on only one project in Iran. A consortium of OVL, Indian Oil and Oil India has discovered oil and gas in the Farsi block in the country and is now establishing its commerciality. | ||||||||||||||||||||||
OVL and the Hinduja group have also shown an interest in developing certain phases of the gigantic South Pars field in Iran. | ||||||||||||||||||||||
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