Iran expects major energy deals with Europe and India

Iran expects to finalise two energy contracts totalling $7 billion with an unnamed European firm and with India's state-run Oil and Natural Gas Corp respectively, state broadcaster IRIB said on Tuesday. Citing Mahmoud Zirakchian-zadeh, managing director of Iran's Offshore Oil Company (IOOC), IRIB said the contracts would be signed in the near future, but did not give a back-up quote.
Zirakchian-zadeh did not name the European firm which he said had completed a development plan for the offshore Lavan natural gas field in the Gulf. "We are now involved in serious negotiation on the contract's financial aspects," he told IRIB, estimating the investment at $4 billion.
Major European firms France's Total and Royal Dutch Shell have delayed or scrapped plans for multi-billion-dollar natural gas export projects in Iran, which is under UN and US sanctions over its disputed nuclear work. The Lavan gas field, which was discovered in 2003, has in place reserves of around 10 trillion cubic feet.
"Based on this project there will be four million tonnes of liquefied natural gas produced annually," Zirakchian-zadeh said. Iran, the world's fourth-largest crude producer, sits on the world's second-largest gas reserves after Russia. But US sanctions hindering access to technology has slowed development of gas exports.
LNG is gas cooled to liquid for transportation in special tankers. Iran has not yet exported any LNG but says it will be able to produce 77 million tonnes a year by 2014. In February, Polish gas monopoly PGNiG said it had signed a preliminary deal with the IOOC to cooperate on managing already-discovered gas reserves.
ONGC Zirakchian-zadeh also said ONGC had completed a development plan for the Farzad gas field, which forms part of the Farsi block in the Gulf, and that "contractual and financial negotiations" are under way. That investment would amount to $3 billion, he said.
Separately, state television quoted him as saying ONGC had discovered an offshore oilfield, Binaloud, in the Farsi block with one billion barrels of in-place reserves of heavy crude. In November in New Delhi, a senior source at a company holding a stake in the block said Iran had approved the commercial viability of natural gas production at the Farsi block operated by Indian firms. The source said then the firms would submit a $3 billion development plan to Tehran.
ONGC and Indian Oil Corp each hold a 40 percent interest in the block, while smaller outfit Oil India Ltd has the rest. It is operated by ONGC's overseas arm ONGC Videsh Ltd. The block is estimated to hold recoverable gas reserves of 12.8 trillion cubic feet.
Iran is drawing interest from Indian and Chinese firms keen to tap the world's second-largest reserves of oil and gas and are less susceptible than many other companies to Western pressure over Tehran's nuclear programme.