OVL to invest over $3b in Iran gas block; submits revised plan

National oil & gas explorer ONGC is planning to invest over USD 3 billion in the Farzad-B natural gas block in Iran, a top company official said today.
The proposed investment will be driven through a consortium of state-run oil companies led by its overseas arm ONGC Videsh (OVL). The statement comes amidst media reports that government is threatening to massively reduce crude intake from Iran as Tehran delays clearing the investment plan in the block.
An OVL-led consortium had already submitted a USD 3 billion development plan to Iran to develop an offshore field in Farzad B, which is said to hold 12.5 trillion cubic feet in reserves, which may last for 30 years.

Iran has been delaying New Delhi's proposal after the US-led western nations lifted the economic embargo on Tehran last year opening its doors to more competitive options, which Tehran wants to explore now.
"Last month, we submitted a revised plan to Tehran for the block. We will be able to develop the block within five years if we are given the go-ahead," OVL managing director NK Verma told reporters on the sidelines of an industry meeting here.
"We are keen to invest north of USD 3 billion to develop this field," he said adding they are awaiting feedback from Tehran now.

It can be noted that New Delhi was one of the few large oil consumers to have continued buying Iranian crude during the global economic sanctions over Tehran's nuclear programme. But since the lifting of the sanctions last year, Iran has sought other investors and there is some uncertainty whether new Delhi would get the Farzad block contract.

Output from Farzad-B could range from 1 billion to 1.6 billion cubic feet of natural gas per day, Verma said.
On its production target, Verma said the company expects to raise production in fiscal 2018 to 14 million tonne oil equivalent, up from 12 million tonne in fiscal 2017.

He also said the company is planning to invest USD 45 million to produce from gas wells owned by Imperial Energy, which was acquired by OVL in 2008.
As part of its plans to secure energy resources, government has chalked out an investment plan worth USD 20 billion in Iran, which will include developing oil and gas fields apart from setting up petrochemical plants, gas-processing facilities and developing the strategic Chabahar
port in Southern Iran.
Earlier this week, media reports said the government would massively reduce its Iranian oil purchases by a fifth over the delay in clearing the investment in the gas field.

For Iran, India is the biggest oil buyer after China. Unhappy with Tehran's delays, the oil ministry has reportedly asked state refiners to cut imports from Iran.
The state-run refiners reportedly told National Iranian Oil Co about their plans to reduce oil imports by a fifth to 1,90,000 bpd from 2,40,000 bpd. Between April 2016 and February 2017, the domestic oil companies more than doubled their intake from Iran at 5,42,400 bpd, compared to 2,25,522 bpd a year earlier.