ONGC eyes Iranian deals
India's state-run explorer Oil and Natural Gas Corporation (ONGC) is examining the viability of investment in Iranian gas projects, Junior Oil Minister Jitin Prasada told lawmakers today.
"The investment decision would depend on the viability of the projects as established through detailed due diligence exercise to be carried out which includes aspect of liquefied natural gas (LNG) pricing," Reuters quoted the minister as saying in a written reply.
Iran has offered Indian companies a 40% interest in the development of phase 12 of its largest gas field, South Pars, in return for 6 million tonnes of LNG.
A consortium of state-run Indian companies, led by ONGC's overseas investment arm ONGC Videsh, holds exclusive exploration rights for the offshore Farsi block.
ONGC and Indian Oil Corporation each own a 40% interest in the Farsi block, and Oil India holds the remainder.
Prasada said master development plan to develop the offshore Farzad-B gas field of Farsi Block was under finalisation in consultation with National Iranian Oil Company (NIOC).
In the master plan, Indian companies plan initial estimated investment of about $5.5 billion to develop the Farzad-B gas field and ship the LNG to India, he said.
Farzad-B gas field, which is estimated to hold initial in-place reserves of 12.5 trillion cubic feet was estimated to produce gas for 30 years, the minister said.
In reply to a separate question, the minister said India was not willing to pay higher price than what was agreed in June 2005 to buy 5 million tonnes of LNG annually from Iran.
Indian companies then signed a 25-year deal with the price linked to $31 per barrel of crude, which translates to $2.9 per million British thermal unit.
But Tehran has not ratified the agreement because of a sharp rise in oil prices.