Iran: Not Obligated to Grant Gas Field Development to India

Despite India's willingness to invest $11 billion in the development of Iran's Farzad-B gas field, the verbal conflict between the two countries has intensified, with Tehran stating that it is not obligated to grant the development of this gas field to India. According to a report on Tuesday, August 1, from the Times of India, Iran has downplayed New Delhi's threat to reduce oil imports in response to this country's actions. Asadollah Qarekhani, the head of the Energy Commission of the Parliament, stated that Iran can find other buyers for its oil. The report adds that in May, Iran signed an agreement with Russia's Gazprom to develop this gas field, which was discovered by a consortium of Indian state-owned companies. This action by Iran is seen as a retaliatory measure in response to India's decision to reduce oil imports from Iran following the failure to grant the development of the Farzad-B gas field to India. Last month, India officially requested Iran to respond positively to its decision to buy oil from the country even when Iran was facing international sanctions. In connection with this request, India offered a proposal for an $11 billion investment to develop this gas field. Dharmendra Pradhan, India's oil minister, wrote in a written response to representatives of the Indian Parliament on July 19 that in the current fiscal year, India's oil imports from Iran will decrease by 25% compared to the previous year. The report adds that a spokesperson for the Energy Commission of the Parliament stated on June 20 to the House of Representatives news agency that Iran considers its economic interests in concluding any contract. According to Asadollah Qarekhani, Iran has provided ample opportunities for India to make decisions regarding the exploitation of Farzad-B, but the conditions proposed by the Indians were not reasonable. He pointed out that under equal conditions, priority for granting fields is given to the Indians, but when there is a significant difference between the demands for this field, Iran will not yield to the Indian requests based on its national interests, although Iran maintains its good relations with them, and the Indians can enter other areas for investment. Iran and India have not yet succeeded in finalizing a contract regarding this project, while Indian Prime Minister Narendra Modi and Iranian President Hassan Rouhani expressed optimism about this issue during a meeting in Tehran last year. However, a report from Reuters on Tuesday indicates that India increased its oil imports from Iran by more than 30% last month compared to June of the previous year. India's oil imports from Iran also showed a 58% increase in the first half of 2017. The ONGC Videsh consortium of India discovered the Farzad-B gas field in the Persian Gulf in 2008 and is currently seeking to obtain a development contract for this field.