India’s flagship explorer ONGC is facing a repeat of KG fiasco in Iran as lengthy negotiations on terms may drive it to a point where its discovered gas reserves in Farzad-B field in the Persian Gulf may be drawn out by neighbouring Saudi Arabia.
State-owned Oil and Natural Gas Corp (ONGC) alleges that 11.12 billion cubic meters of natural gas worth Rs 11,055 crore has flowed from its idling Krishna Godavari basin blocks in Bay of Bengal blocks to neighbouring KG-D6 fields of Reliance Industries.
And the same is now on the verge of repeating in the Farzad-B field, which it had discovered in 2008 but no contract to exploit the 12.5 trillion cubic feet of recoverable reserves has so far been concluded with Iran.
Sources said a portion of Farzad-B field extends into territorial waters controlled by Iran’s regional arch-rival Saudi Arabia. Saudi Arabia has already drilled wells on the area falling in its territory, which it has named Hasbah field, and has begun production.
The two fields are connected, with the area falling in Iranian territory holding larger share of 12.5 Tcf of recoverable reserves while the Saudi territory has only 3 Tcf or so. But the two fields are connected and whosoever is able to move first would extract more benefits.
Sources said in the dispute with RIL, ONGC is claiming compensation for its gas flowing through under-sea connected reservoir to KG-D6 and the government has constituted a one-man committee to look into the issue and suggest compensation.
It was expected that Prime Minister Narendra Modi’s visit to Tehran today and tomorrow may see finalising of a contract, giving developmental rights of Farzad-B field to ONGC Videsh Ltd, the overseas arm of the state explorer.
But Iran is yet to agree to USD 4.3 billion master development plan submitted by OVL. Also, it is yet to agree on the price at which OVL can take all of the gas produced from the field, they said adding that no definitive contract for the development of the field would be signed during Modi’s visit.