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India’s OVL signs $900 million Iran oilfield deal

Muslim Times (Web Desk) – India’s ONGC Videsh Ltd (OVL) has signed a cooperation agreement with Iran’s IDRO Oil to jointly bid for a $900 million development plan of Susangerd oilfield in southwest Iran, IRNA reported on Tuesday.

The agreement is similar to the one which IDRO Oil signed with Russia’s Zarubezhneft last month in order to qualify for negotiating the Susangerd contract with the National Iranian Oil Company (NIOC).

“Given a similar MoU signed with Russia’s Zarubezhneft, the aim of this agreement with India’s ONGC Videsh is to form a possible consortium and predict the results of negotiations,” IDRO Oil Managing Director Nasrallah Zarei said.

NIOC’s plan is to produce 30,000 barrels per day (bdp) of crude oil from the Susangerd field which is located 45 km from Ahvaz. The field, discovered in 2009, is estimated to hold more than 5 billion barrels of in-place reserves.

Zarei predicted that the technical proposal would be ready by the end of the Persian month of Esfand in mid-March to submit to NIOC. IDRO Oil signed a contract with Austrian consulting company HOT Engineering in December to prepare a master development plan for the Susangerd field.

IDRO Oil, Zarubezhneft and ONGC Videsh will now set up a joint working group “as soon as possible” and once they reach a final agreement, they will begin negotiations with NIOC for a contract, Zarei said.

IDRO Oil is a subsidiary of the state-owned Industrial Development and Renovation Organization, one of the largest companies in Iran established before the 1979 Islamic Revolution. The company has total assets of more than $45 billion.

Zarubezhneft is a state-controlled company based in Moscow that specializes in exploration, development and operation of oil and gas fields outside Russia. The company signed an MoU in July to conduct technical surveys on Shadegan and Rag Sefid fields in Iran’s Khuzestan province and submitted results on the former field to the National Iranian South Oil Company (NISOC) last month.

OVL is the overseas arm of state-owned Oil and Natural Gas Corp (ONGC) which discovered Iran’s Farzad B gas field in the Persian Gulf a decade ago. Its bid to get development rights to the field has been mired in differences over the costs of the project and other issues.

Last month, the Indian company said it would rework the $6.2 billion cost of developing the giant offshore field in order to make a fresh bid.

OVL also said it would bid for development of Iran’s giant South Azadegan oilfield. The Indian firm is one of the 34 companies pre-qualified by Iran last year for development of the field, which contains an estimated 33 billion barrels of in-place oil, of which 6 billion barrels is believed to be recoverable.

Iran discovered Azadegan oilfield in 1999 and later divided it into South Azadegan and North Azadegan sections.

On Saturday, NIOC Managing Director Ali Kardor said Iran will sign three oil deals, including North Azadegan, before the end of the current Persian year this month which will include operation of the fields for 20 years.

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