Sanctions May Affect OVL Plans in Iran

The ongoing sanctions imposed by the US and some European countries against Iran may put some of the ONGC Videsh's (OVL) plans in that country on the backburner, Press Trust of India reported Monday.

In Iran, OVL, the overseas arm of ONGC, is currently engaged in the Exploration Service Contract (ESC) for Farsi Offshore Exploration Block involving the Master Development Plan for the Farzad 'B’ gas field in the Persian Gulf at an estimated investment of over $5 billion.

ESC for Farsi Offshore Exploration Block was signed in December, 2002. OVL as an operator with 40% stake carried out seismic survey and drilled four exploratory wells in the Block during 2006-07 resulting in discovery of oil and gas. The other consortium partners are IOC with 40% and OIL with 20% stake.

Subsequently, the Farzad-B gas field was declared commercial in 2008 by National Iranian Oil Company.

The Master Development Plan for the Farzad ‘B’ Gas Field is currently in the finalisation stage. OVL’s share of investment was about $36 million as on March 31, 2011.