Iran strikes deal: buy LNG, get an oil field

Iran, under the US scanner for its nuclear programme, is wooing India through enhanced cooperation in the hydrocarbon sector. Earlier this m...

Iran, under the US scanner for its nuclear programme, is wooing India through enhanced cooperation in the hydrocarbon sector. Earlier this month, it sent a list of five producing and semi-discovered blocks where it is willing to share equity with an Indian government firm.

Under a pact signed between the two, India has to pick one producing and one semi-discovered oilfield in return for buying five million tonnes of LNG from Iran for 25 years.

The list from Iranian Petroleum Ministry includes three producing oilfields, prime among which is Parsi Reservoir with a daily output of 100,000 barrels. The others are Sarvak in Northern Azadegan block with output of 46,000 barrels per day and Cheshmeh Khosh with 31,000 barrels.

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India’s largest oilfield at Mumbai High, which accounts for nearly 80 per cent of country’s output, produces 220,000 barrels per day. India imports nearly 70 per cent of its crude oil requirement to produce petroleum products.

The semi-discovered blocks on offer from Iran are Abadan Plain and Saveh-Gartnsar. Though talks between the two nations have been on for almost a decade for a natural gas pipeline — Iran sits on a huge gas reserve because Pakistan is in the way of a line to India — mutual cooperation picked up pace after Iranian President Khatami’s visit to New Delhi in January.

During the visit, a memorandum of understanding was signed which covers cooperation in a slew of projects involving oil exploration, refinery revamping, petrochemicals and compressed natural gas. And Teheran is keen that the momentum is maintained.

It suggested that the India-Iran joint working group be held at Teheran between October 4th and 9th.

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However, New Delhi has asked for a delay until technical details of the oil fields on offer are firmly established.

During that period, a team of officials from ONGC Videsh Limited will visit Iran to evaluate the offered blocks. While Iran has agreed to provide equity in downstream LNG project to Indian government firms, India is open to partnering with an Iranian state-run company in any of the sectors of the hydrocarbon chain.