Farzad-B Gas Field: After Ejecting India, Iran Awards $1.8B Project To Local Firm

Months after ejecting India from the ambitious $1.8 billion project, Iran has roped in local firm Petropars Group to develop the Farzad-B gas field in the Persian Gulf.

The massive gas field, estimated to possess 21.7 trillion cubic feet gas reserves, 12.8 trillion cubic feet natural gas, and 212 million barrels gas condensates, was discovered by a consortium of three Indian companies in 2008 in the Farsi offshore block of the Persian Gulf.

A website affiliated to Iran’s Oil Ministry on Monday confirmed that the project has been awarded to Petropars Group, which earlier developed the mega gas field of South Pars, after talks with Indian companies failed.

Under the deal signed between state-owned National Iranian Oil Company (NIOC) and Petropars, 28 million cubic meters of sour gas would be produced on a daily basis for five years.

“Today is an important day,” the website quoted Oil Minister Bijan Zanganeh as saying. “The contract to develop the Farzad-B gas field was signed between the National Iranian Oil Co. as the employer and Petropars Group as the contractor.”

Zanganeh said the Indian companies were not willing to take part in the project, despite negotiations taking place between the two sides twice “due to [US] sanctions”.

Earlier, Iran was going ahead with local firms to develop the gas field after New Delhi failed to respond to “multiple ultimatums” issued by Iran over the years.

“We gave them multiple ultimatums, including last year, but probably they had no problem in losing the project, and being subservient to the US,” a highly placed source said at the time.

The gas field was discovered by Indian companies Oil and Natural Gas Corporation (ONGC), Oil India Limited and Indian Oil Corporation in 2008, following which Tehran and New Delhi negotiated the terms of the field’s development for years.

Despite the initial investment of around $100 million in the field, India later retreated due to US sanctions. However, the engagement between the two sides continued for years.

In May 2019, Zanganeh revealed that NIOC had invited the Indian consortium led by ONGC Videsh Ltd. for negotiations on the project, as a final ultimatum.

Later that year, NIOC head Masoud Karbasian said Iran had decided to proceed with another local operator for the project, implying that the Indian side had not responded favorably.