Ahead of Prime Minister Manmohan Singh’s much-awaited Tehran visit, Iran is pushing India to go full-throttle on a gas block, which may irk the Americans as it goes against the US-sanction on that country.
Considering the complexities involved in the move, Singh is likely to seek more time for the project in question while underlining the robust energy sector cooperation between the two countries, HT has learnt.
The PM will be leaving for Iran on Tuesday to attend the non-aligned movement summit (NAM) as well as the bilateral visit to Iran.
The project in question is the Farzad-B gas block given to ONGC Videsh Limited (OVL).
The total investment involved in the project could be $6 billion.
The US can impose sanction on any company that invests more than $20 million in Iran’s oil and natural sector.
The sanctions are aimed at stopping Iran from its nuclear programme.
According to sources familiar with the developments, the OVL is vulnerable to US sanctions mostly on two counts — OVL has licences from many US companies and the banking sanctions imposed by the can come in the way of raising money.
Sources said that PM will underline India’s commitment in the working together with Iran.
But the project to develop 12.5 trillion cubic feet of gas reserves in Farzad-B block needs more time due to the "complexities and uncertainties involved."
At present, the OVL has been negotiating the Development Service Contract (DSC) with the Iranian Offshore Oil Company (IOOC) for sometime now, but the US sanctions have cast their sanctions on it.