Iranian MP Rejects Special Treatment for India in Farzad-B Project

EghtesadOnline: Tehran has opened talks with Russia and several other countries on developing Farzad-B Gas Field in the Persian Gulf, a parliamentarian said, indicating that there will be no backdoor deal with New Delhi on the coveted gas project.

News ID: ۷۴۳۰۱۸

26 July 2017

Indian officials have long argued that they should have preference to develop Farzad-B as the field was discovered by a consortium of Indian companies nearly a decade ago, and additionally, because India was one of the few countries that continued to purchase crude oil from Iran when international sanctions were in place.

However, Asadollah Gharekhani, the rapporteur of Majlis Energy Commission, believes that these assertions are groundless.

"India had been previously assigned to conduct technical surveys on Farzad-B, but awarding the development rights to Indians was never part of the agreement," Gharekhani was quoted as saying by the Majlis news portal ICANA.

"The Oil Ministry has announced that it is ready to hold talks over Farzad-B Gas Field and several countries, including Russia, have voiced interest," the lawmaker said, adding that the ministry is keen to fast-track the gas field's development.

According to Financial Tribune, Oil Minister Bijan Namdar Zanganeh said in May that Iran had signed a preliminary agreement with Gazprom, Russia's largest gas producer, on developing Farzad-B.

India's Petroleum Minister Dharmendra Pradhan said last week that the country's state refiners will import less Iranian crude oil in 2017-18. The decision is widely seen as a direct response to Iran and India's disagreement over the Farzad-B project.

According to Gharekhani, the ministry "has found alternative [customers]" for crude oil it sells to India.

The world’s third-largest consumer of the commodity is one of the biggest buyers of Iranian crude.

"Iran may favor India [for Farzad-B] on a level playing field. But their technology, know-how and amount of investment should be different from others. Iran will choose a contractor based on its national interests," he said.

This month, state oil company ONGC Videsh submitted a proposal to invest $6 billion on the Farzad-B field and $5 billion to build a liquefied natural gas export facility in southern Iran.

Past Disputes

Gharekhani also played down the significance of Indian crude purchases under sanctions.

"India was allowed to buy certain amounts of oil from Iran under international sanctions regime … It was agreed that they pay oil dues in dollars, but in the end, they said it was unfeasible. They later said the payments will be made half in dollar and half in rupee, but the rupee depreciated [against dollar] by 30% and thus Iran's revenue was cut by 30%," he said.

"Instead of cash payments, India sold cheap commodities for Iran's crude. They maintained their own interests during sanctions and we, as well, will put our own interests first."

According to Akbar Torkan, a top presidential adviser, Iran's trade relations with India and China, the biggest buyers of Iranian crude, were "humiliating" during sanctions.

"Iran's wealth and national interest were plundered by a bunch of marauders from Saudi Arabia, the UAE, Qatar, China and India," Torkan said in an interview late last year.