Notwithstanding the anti-Iran sentiments of the West and the US and EU-imposed sanctions on the country, the UPA government has officially reached out to strengthen economic ties with the energy-rich Islamic nation.Petroleum minister Veerappa Moily on September 9 wrote to his Iranian counterpart, Bijan Namdar Zanganeh, for a "fruitful and commercial co-operation" between the two countries. Moily sought Zanganeh’s intervention to formalise the participation of top Indian oil and gas companies ONGC, Indian Oil and Oil India in Iran’s prestigious Farzad-B gas field in Farsi block in the Persian Gulf.
“I am sure that relations bet­ween our countries are going to be strengthed and would grow further under your able leadership,” Moily wrote in his letter, a copy of which is with HT.
This is a significant move by Moily as New Delhi has been apprehensive of the impact of sanctions imposed by Washington on its companies. India’s participation in this Iranian field will give it access to substantial gas reserves and help it contain its huge oil import bill, as it is negotiating for a production sharing contract (PSC) that would offer Indian companies a guaranteed share of production.
Exploration and exploitation of the Farsi block could unfold an investment of $15 billion. The investment for exploration is estimated at $5.5 billion, with developing the field and building an LNG terminal and transportation facilities to get the gas to India, entailing another $8-$9 billion of investments.
Indian companies have been in talks with Tehran since 2009 for developing the Farzad B gas field, estimated to hold over 13 trillion cubic feet of recoverable gas.
Moily’s letter mentioned that in the inter-ministerial meeting on May 27 it was agreed that both sides would work to negotiate and finalise the PSC within three months. “Such a hard achieved level of mutual understanding should not be allowed to go waste ... the two sides must carry on and finalise the draft PSC for early development of the field,” the letter said.