Flagship explorer Oil and Natural Gas Corporation and the Hinduja group plan to invest up to $10 billion for developing oil and gas fields in Iran. ONGC Videsh, ONGC’s overseas arm, and Hinduja group firm Ashok Leyland Project Services Ltd plan to sign an MoU with Iran’s Naftiran Intertrade Co and Petropars Ltd to this end.
"The development of Phase-12 of South Pars gas field and Azadegan oilfield will cost $5 billion each," Sharma on Wednesday said. "They (Iranians) are very interested. They are very satisfied with ONGC’s competence, technical and financial capabilities and project execution."
"We will begin due diligence for the two fields tomorrow (Thursday)," Sharma said. Iran does not give companies a stake in its oil and gas fields but signs buyback agreements where companies hand over operations of fields to NIOC after development and then receive payments from oil or gas production for a few years to cover their investment. "It will be a service contract that we will be assured of oil and gas as our remuneration," Sharma said.
"Earlier, there were some concerns like the service contractor having to bear any cost escalations happening after the budget for the field development was fixed. Now, they have made some changes and the budget will be frozen only after award of tenders. This takes care of the cost escalation issue," Sharma said.
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