India has suffered a major setback from Iran. India has lost its $ 3 billion gas project in Iran. Iran has dumped India from the Farzad-B gas field in the Persian block. The gas reserves were discovered in 2008 by a consortium led by India’s state-run oil companies. Iran pulled India out of the project after a decade-long negotiation with the consortium.
Iran’s state-run oil company NIOC signed a $ 1.7 billion deal with Petropars on Monday to produce from this gas stockpile. According to the Iranian news agency Shana, the deal took place in the presence of Iran’s petroleum minister Bijan Zangeneh. This is the second time India’s investment proposal in Iran has suffered a setback. Last year, Iran rejected India’s $ 2 billion proposal for the Chabahar railway link project and decided to build it on its own. The top leadership of both countries had committed to take this deal forward.
There was a deadlock in the conversation about Farzad-B from the very beginning. ONGC Videsh-led Indian Consortium signed the Exploration Agreement in 2002 and invested $ 400 million. Iran allowed this agreement to expire in 2009, a year after the discovery of gas reserves. It is not yet clear how the Indian consortium will recover its investment. Several deadlines were missed for the deal. India blamed Iran for repeated changes in the terms of the deal and for delaying it.
The Times of India first reported on May 30, 2017 that Iran is in the process of awarding the project to another country. On June 7 of the same year, TOI reported that Iran was entering into a basic agreement with Farzad-B with Russian company Gazprom. According to Indian officials, Iran’s intent was cleared in March 2017 when it did not respond to the consortium’s field development plan. This was reduced from $ 4 billion to $ 3 billion after NIOC reduced the scope of work. The original plan handed over in 2011 had a target of investing $ 11 billion, including infrastructure for the export of gas from ships.