An Indian consortium comprising Oil and Natural Gas Corporation Limited (ONGC), Indian Oil Corporation and Oil India Limited is willing to spend Rs. 71, 296 crore (equivalent of 11 billion dollars) on the development of Farzan-B Field, a giant natural gas field of Iran.
ONGC Videsh Limited, a division of ONGC Limited, India’s largest natural gas exploring company, on behalf of the consortium, has made the “best offer” to Iran. The Indian company has also promised to build the requisite infrastructure for export of fuel if Iran guarantees a “reasonable return” of about 18 per cent on the investment.
Out of the total investment, an approximate amount of Rs. 38,889 crore (about 6 billion dollars) is proposed to being spent on the Farzan-B Field and the remaining amount on the development of export facility for the liquefied natural gas. Indian companies are also ready to purchase all the gas that the proposed project will export.
India is the fourth-largest buyer of LNG in the world and with the demand of clean-burning fuels growing steadily, ONGC is seeking to acquire more gas resources. Iran, on the other hand, is catching up from sanctions that clamped down investment in its energy sector.
The deal for development of the oilfield that contains reserves of around 19 trillion cubic feet was expected to conclude by February. The delay in finalization of the deal has been affecting oil trade between Iran and India.
Bloomberg reports that the information was revealed by Narendra Kumar Verma, managing director of ONGC Videsh Limited, the unit taking care of the overseas investments of ONGC Limited.
Verma said that the company has given its “best offer” to the Iranian company and now it is “up to them to agree or not agree”. He further said that his company has clearly told Iranian authorities that some “basic returns are necessary”.