 "Oil falls as Iran blunts freeze hopes")
India has sought a discovered oilfield from Iran for raising crude oil imports from the Persian Gulf nation as part of efforts to widen economic and energy ties post lifting of sanctions.
Indian Oil Corp (IOC), the nation's largest oil firm, has proposed to Iran that it be given rights to operate and produce crude oil from the discovered field to help move away from buyer-seller relationship to a strategic partnership, sources privy to the development said.
The oil produced from the field can then be shipped home, the IOC has said.
IOC had last fiscal imported 1.2 million tonnes of crude oil from Iran. In the fiscal year that began from April 1, it is looking to raise it by at least three-fold.
Prime Minister Modi's visit to Iran was aimed at boosting trade and commerce between the two countries. His trip came just months after lifting of international sanctions on Iran following Tehran's historic nuclear deal with the Western powers over its contentious atomic programme.
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Besides IOC, ONGC Videsh Ltd (OVL) has also sought two discovered fields from the 16 fields that Iran is likely to put on auction shortly.
The fields sought by OVL, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), is besides the Farzad-B offshore field for which it is in advanced talks to secure developmental rights.
OVL had in 2008 discovered the Farzad-B field in the Persian Gulf. The field holds 12.5 trillion cubic feet of recoverable reserves.
Sources said that Iran has so far not responded to the requests by the Indian firms.
It has, however, shown willingness to give Farzad-A, which holds 283 billion cubic meters of reserves.
The field besides holding smaller reserves is more challenging, OVL feels.
Sources said that India may import as much as 20 million tonnes of crude oil from Iran in 2016-17 fiscal, up from about 11 million tonnes in the previous year.
This follows lifting of sanctions against Iran in January.
Till 2010-11, Iran was the second biggest supplier of crude oil to India after Saudi Arabia. Fresh US sanctions in 2010 led to imports, which were 18.5 million tonnes in 2010-11, to fall to 11 million tonnes. Iraq is now the second biggest supplier of oil to India.
Sources said that India has also expressed interest in investing in chemicals, petrochemicals and fertiliser plants if Iran provided natural gas at low prices. It is also looking at setting up an ammonia/urea plant at the Chabahar Free Trade Zone with long-term off-take of urea to India.
While Mangalore Refinery and Petrochemicals Ltd and Essar Oil Ltd — the biggest Indian buyers of Iranian oil — are likely to maintain buying at around 5 million tonnes each, Bharat Petroleum Corp Ltd and Hindustan Petroleum Corp Ltd (HPCL) may begin importing oil from the Persian Gulf nation.
HPCL-Mittal Energy Ltd has indicated it will buy a small quantity with an option to raise volumes.
In addition, private refiner Reliance Industries is seeking to buy 5-6 million tonnes of Iranian oil, mainly heavy grades.
India imports about 189 million tonnes of crude oil to meet about 80% of its oil needs. Saudi Arabia sold about 38 million tonnes of oil to India in 2015-16, while Iraq supplied 33 million tonnes.
