Iran has offered ONGC Videsh, the overseas arm of the state-run Oil & Natural Gas Corporation, and its partners a 30% stake in the development of Farzan-B gas field in the Persian Gulf.

The field, which holds 23 trillion cubic feet of in-place gas reserves, of which 60% is recoverable, was discovered by an Indian consortium of ONGC Videsh (OVL) and Natural Gas Corp (ONGC) in the 3,500-square kilometre Farsi offshore exploration block in 2008. The Farzan-B gas field also holds gas condensates of about 5,000 barrels per billion cubic feet of gas.

OVL offered to invest up to $11 billion to develop the field and submitted a Master Development Plan (MDP) to Iranian authorities in 2011 but negotiations got stalled after sanctions were imposed by the US over Iran’s nuclear plans.

Negotiations began again in 2015, but in February 2020, the National Iranian Oil Company (NIOC) informed OVL that the contract would be given to a local Iranian company.

The Exploration Service Contract (ESC) contract under which OVL and its partners had the field in Farsi block, stipulated for the discoverer to be a part of the field development.

The Iranian authorities have now asked OVL consortium to exercise its right under ESC development contract to a minimum of 30%, giving the Indian side up to 90 days, after which the offer will expire, reported PTI.

Officials told PTI that communication and comments on the confidentiality agreement were sent to NIOC in March and a reminder in the following month for further discussions to participate in the development contract. The NIOC has not responded to that still.

OVL holds a 40% stake in the Farsi offshore exploration block in the Persian Gulf Iran, Indian Oil Company (IOC) holds 40% and the remaining 20% is controlled by Oil India.

The ESC for the block was signed on December 25, 2022 and OVL in 2008 made the discovery.