After being pulled out of a major rail project in southeastern Iran bordering Afghanistan, India is also set to lose a major gas field project that has been underway for 10 years.
The Indian Foreign Ministry said in a statement on Thursday that Tehran would develop the Farzad-B gas field in the Persian Gulf region on its own and possibly include India at a later stage.
Last week, Masood Karbasian, managing director of the National Iranian Oil Company, told reporters that a new operator had been set up to replace India’s ONGC with a gas field.
The field will have an estimated 21.7 trillion cubic feet of natural gas reserves, including 12.8 trillion cubic feet of natural gas and 212 million barrels of gas concentration, which was acquired in 2008 by three Indian companies, ONGC, Oil India Limited and Indian Oil Corporation.
According to the agreement, the Indian field was to prepare the field, but it abruptly stopped work in 2012 after the escalation of sanctions against Iran.
India agreed to return to the project in 2015 after sanctions were eased following the signing of a nuclear deal between Iran and the West.
Sources familiar with the matter said on condition of anonymity that things had deteriorated again between the resumption of US sanctions on Iran in May 2018 and that the matter had discouraged India from advancing the project.
Sources said that by May 2018, the two sides had made tremendous progress and agreed on key details of the project, but US sanctions had made matters worse.
According to reports, there were differences between the two sides, especially on the number of pipelines to be laid in the development project and financial investment.
In May 2019, Iranian Oil Minister Bijan Namdar Zanganeh said his ministry had drawn up a plan to finance the construction of the Farzad B gas field. Sources said that the National Iranian Oil Company (NIOC) had asked the Indian side to submit a financial plan for the preparation of the field, however, the sources said that Iran was not impressed by the plan and That said, India reportedly planned to invest 5. 5.5 billion.
After India’s slowness in presenting a new project in August 2019, Karbasin said Iran would move forward with another operator for the project.
The Indian Foreign Ministry said that the change in policy by Iran affected bilateral cooperation.
Tehran-based analysts, speaking on condition of anonymity, told Anadolu Agency that relations between the two countries have suffered a “major setback” since the project fell out of India’s hands as Farzad-B. The gas field and the Chabahar port were a great achievement in bilateral relations between the two sides.
Initial reports claimed that Iran had pulled out of the rail project after India expressed reluctance to start work due to US sanctions.