ONGC Videsh Ltd (OVL) has sought 20 per cent participating interest in Iran’s Yadavaran field, which has an estimated capacity to yield 60,000 barrels per day (bpd) of crude.
“Exercising our option we have asked Iran to consider giving OVL a 20 per cent stake in the project. The fate of the five-million-tonne liquefied natural gas (LNG) deal, which was inked between India and Iran in 2005, is linked to the development of these fields,” official sources said.
In 2005, as part of a memorandum of understanding (MoU) signed with India, Iran had agreed to give 100 per cent participating interest in the Jufeyr project along with 10 per cent in the Yadavaran project to OVL. “However, if OVL, is unable to get 100 per cent participating interest in Jufeyr field then there was an option that Iran would offer 20 per cent in Yadavran project,” the sources told Business Line.
This move by OVL is significant as Iran is reported to be in talks with China for a stake in Yadavaran. Besides, PEDEC, a subsidiary of National Iranian Oil Company (NIOC), is understood to have informed OVL that the MoU signed in 2005 has expired though OVL had prepared a master development plan for the project and submitted the same to PEDEC.
According to sources, “the contract cannot be considered to have expired as OVL has submitted necessary papers on the project.”
In a deal last year, NIOC had offered the Jufeyr oilfield to Belorusneft, the national oil company of Belarus. “Since Jufeyr field has been offered to Belarus, we would like them to consider the option of offering 20 per cent stake to OVL in Yadavaran project,” sources said, adding that “Iran sits on the world’s second largest oil and gasreserves, a huge potential prize for international oil companies.”
A sale-and-purchase agreement between India and Iran for five million tonnes of LNG, with an option of raising it to 7.5 million tonnes, was signed in 2005 June. At present, there is only one project for the Indian oil companies in Iran.
The Indian companies have got stake in Farsi block. The exploration service contract for the Farsi Block was won by an OVL (40 per cent)-led consortium, consisting of Indian Oil Corporation (40 per cent) and Oil India Ltd(20 per cent) in 2002. Though substantial progress seems to have been made in the natural gas pipeline project from Iran to India via Pakistan, the fate LNG deal seems to hang in balance.
Source: Money Control