Retaliating to India's plans to cut oil imports from Iran, Tehran has signed a basic agreement with Russia’s state-owned energy giant Gazprom for development of the Farzad-B gas field, discovered by a consortium of Indian companies led by ONGC Videsh Ltd (OVL), the overseas arm of state-owned Oil and Natural Gas Corp (ONGC).
Iran's oil minister Bijan Zanganeh recently told Argus Media, the global energy market information provider, that the Islamic Republic has signed agreements with Gazprom for three gas fields, including the Farzad-B field.
"We have signed an initial agreement with them for Farzad, the North Pars and Kish fields," Zanganeh told Argus in response to a question.
Farzad-B was discovered by the OVL-led consortium in the Farsi block in 2008. It has an in-place gas reserves of 21.7tn cubic feet (tcf), of which 12.5 tcf is recoverable.
The project has so far cost the OVL-led consortium, which also includes Oil India and the Indian Oil Corporation (IOC), over $80mn.
Since lifting of the sanctions last year, Iran has been playing hardball over award of rights to develop Farzad-B gas field in the Gulf’s waters to OVL.
As the row over the rights escalated, India asked its state-owned oil companies to cut imports from Iran by nearly 25%.
Iran hit back by reducing the 90-day credit period given to IOC and Mangalore Refinery and Petrochemicals Ltd (MRPL) to 60 days.
The National Iranian Oil Company (NIOC) also cut the discount it offers to Indian buyers on freight from 80% to about 60%.