Iran may offer the Farzad-B gas block to India on easier terms

Iran is expected to offer the Farzad-B gas bloc to India on easier terms during talks between External Affairs Minister Sushma Swaraj and her Iranian counterpart Javed Zarif, here on Tuesday.

But, with the US refusing to allow India an extension to a waiver allowing New Delhi to source crude oil from Iran, Zarif may push India to take a tougher stance and shelve its plans of cutting down Iranian 

oil imports.

In November last year, India — the third largest oil importer — had managed to squeeze out a six-month waiver from the US with regards to sourcing oil from Iran. But with the Trump administration remaining firm, New Delhi has been unable to buy more crude oil after the quota of 9 million barrels was shipped. 
 

Now, after both EU and Russia have failed to reverse the clampdown on Tehran, the Hassan Rouhani administration has turned to India with a lure, diplomatic sources said.

“Indians have had the opportunity of getting into Farzad-B (gas field) earlier, and they still have it,” Gholam Reza Ansari, deputy minister for Economic Affairs at Iran's Foreign Affairs Ministry, told Business Standard back in January, later hinting that Iran was willing to provide easier terms for India once negotiations progress. Tehran's position in discussions with India has only gotten weaker since then, with all hopes of overturning the US sanctions were dashed, petroleum ministry officials said.

But Iran’s plans may come to nought as Indian officials are now not keen on the block because of the viability factor. Senior officials from Oil and Natural Gas Corporation Videsh Limited (OVL) — the overseas investment arm of ONGC — have said it may reduce its investment outlay, and agreed to Iran taking delivery of all gas already produced in the field.

According to the sources, the deal was expected to be signed on September 15 last year but got postponed after a European consultant company and an Australian consultant company withdrew from their contracts. A similar concern was raised by State Bank of India (SBI) that had exposure to several projects of OVL. “OVL’s investments in Brazil and Sudan were run from our Amsterdam office and SBI has major exposure to it. We were told those investments might also get affected if we go ahead with the Farzad deal at a time when the US has imposed sanctions,” said an official. 

Farzad-B’s gas reserve is estimated at 21.6 trillion cubic ft. 

But Iran’s plans may come to nought as Indian officials are now not keen on the block because of the viability factor