Iran resumes oil project abandoned by Indian firm

on   /   in Sweet Crude 7:07 pm   /   Comments

By Michael Eboh with Agency Report

Iran is re-appraising an offshore oil field that India’s Oil and Natural Gas Corporation (ONGC) had abandoned as commercially non-viable.

According to Jalal Mousavi, head of the National Iranian Offshore Oil Company’s research and development bureau, the project is at the stage of processing seismic data.

Mousavi said Binaloud held about 3.5 billion barrels of oil in place, more than three times ONGC’s estimate of 1 billion barrels of heavy crude with 14-degree API gravity.

Mousavi said, “Even though preliminary studies by ONGC evaluated the field as uneconomical, [our] studies and examinations show that with different approaches we can produce from the field.”

Reports by said the unnamed consultants from two domestic universities have suggested Binaloud’s crude could be produced economically within the next few years.

Mehr news agency cited a 2013 National Iranian Oil Company statement confirming the start of a study to re-evaluate Binaloud and challenge ONGC’s assessment of the field as non-commercial.

The news agency said ONGC discovered Binaloud in 2009, adding that in accordance with Tehran’s model for oil exploration and development, the Indian state-owned company was granted priority to develop its discovery.

It said the company’s subsequent decision to abandon Binaloud, however, removed its eligibility to perform further exploration in the offshore license area, opening the way for Tehran to step in.

Mehr said Iran and India in 2002 announced a memorandum of understanding on developing the Farsi block, which contains Binaloud and the large Farzad B gas field, noting, however, ONGC never signed a contract with Tehran for the proposed $5 billion oil and gas development.

In February 2012, Iran issued an ultimatum to ONGC to decide whether it would develop Farzad B, after the company missed the November 2010 deadline that had been set for the investment decision.

Farzad B’s reserves are estimated at 12.5 trillion cubic feet of natural gas and 212 million barrels of condensate.

The first development phase of the project is expected to yield 1.1 Bcf/d of gas output.

International oil companies, even those such as ONGC that are not directly bound by US and EU sanctions on Iran over its nuclear program, have recently been wary of participating in Iranian oil and gas development. Most have bowed to US-led pressure aimed at isolating Tehran.

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