Iran Replaces OVL in Offshore Oil Block
From Times of India
Iran has given to a domestic company the task of developing an offshore oilfield that was discovered by an Indian consortium led by ONGC Videsh Ltd (OVL) but later abandoned as commercially unviable. OVL and its partners IndianOil Corporation and Oil India Ltd had in 2009 dropped plans to develop the Binaloud oil find in the Farsi offshore block as they found one billion barrels of reserves commercially unviable.
But as Iran’s semi-official Mehr news agency reports said, Iranian Offshore Oil Company has found production of heavy crude oil from the field would be possible in the near future. On the surface, Iran’s move may appear as a logical progress in a commercial matter. But given the technical limitations of its refineries, capacity constraints and curbs on oil exports, it signals Tehran’s unhappiness with India for dragging its feet on oil and gas projects — development of other fields, liquid gas export terminal and the gas pipeline.
In February 2012, Iran had issued an ultimatum to OVL to decide whether it would develop Farzad B, a huge gas find in the Farsi block, after the company missed the November 2010 deadline that had been set for the investment decision.
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