Zee News reported that ONGC Videsh Limited and its partners Indian Oil Corp and Oil India Limited have proposed an investment of about USD 5 billion in bringing to production a massive gas field they discovered in offshore Iran, in the next 3 to 4 years.
Source in know of the development said "OVL has submitted a development plan to the Iranian authorities. The investment proposed is around USD 5 billion."
Iran had in September 2008 approved the commerciality of the discovery in the Farsi block. The discovery, which was subsequently named Farzad gas field, may hold in place reserves of up to 21.68 trillion cubic feet of which recoverable reserves may be 12.8 trillion cubic feet.
The source said Iran has so far not responded to the development plan which was submitted this month. OVL and IOC have 40% stake each in the 3,500 square kilometer Farsi offshore block that was awarded to the consortium in 2002. OIL has the remaining 20%. The 3 firms had also found oil on the block and in November 2008 submitted commerciality report of the discovery.
Iran has not yet approved the commerciality of the oil find, which may hold reserves of up to one billion barrel. If the consortia gets the developmental rights, they will be paid a 15% rate of return over and above the investments they make.
Iran's state owned National Iranian Oil Co is the owner of the oil and gas found in the country. Iranian law does not allow foreign firms ownership of oil and gas and they get a fixed fee for their effort in discovering hydrocarbons and bringing them to production.
The source said NIOC also has the marketing rights and the Indian consortium has requested them to allocate the gas to us for converting it into LNG.
The official said OVL-IOC-OIL had found in the BB structure in 2006, the discovery has been named Binaloud. Feasibility report of the oilfield has been submitted to the NIOC on November 26th 2008.
Official said that during exploration phase, the OVL-IOC-OIL consortium had struck crude oil in 3 wells in the Farsi block, 90 kilometer off Bushehr port. It found gas in one well.
OVL, the overseas arm of state run Oil and Natural Gas Corp, IOC and OIL have a service contract for the Farsi block where they will be reimbursed 35% plus USD 90 million investment they made during the exploration phase.
Official said that if the consortia gets the developmental rights, they will be paid a 15% return on their investment. In the commercial viability report to NIOC, OVL the operator of the field said the least gas volume was 9.48 trillion cubic feet and the high case estimate was 21.68 trillion cubic feet after independent studies by Fugro Robertson Limited of the UK and ONGC's Institute of Reservoir Studies.
Under the Iranian rules, the project promoters are not allowed to take oil or gas out of the country. OVL had to fund all exploration operations that would be reimbursed only after ascertaining commerciality.
(Sourced from zeenews.com)
