OVL to bid for South Azadegan oilfield, rework Farzad-B cost

ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), will bid for development rights of Iran's giant South Azadegan Oilfield in direct competition with the likes of global giants like Shell, France's Total, Petronas of Malaysia and Russia's Gazprom.

OVL will also rework the $6.2 billion cost of developing the Farzad-B gas field in the Persian Gulf, which it had discovered a decade back, to get Iran to award rights of the field to it, sources privy to the development said.

OVL is one of the 34 companies Iran pre-qualified last year for development of South Azadegan field, which contains an estimated 33 billion barrels of oil in place, of which 6 billion barrels are deemed recoverable.

Sources said OVL will make a formal bid when National Iranian Oil Co (NIOC) opens a tender for developing the South Azadegan oilfield.

Other firms prequalified include Japan's Inpex Corp, China's CNPC, Eni of Italy, Sinopec of China and Russia's Gazprom, Lukoil and Rosneft.

Sources said OVL had last year made its 'best' offer to invest $11 billion in developing the Farzad-B field as well as in building the infrastructure to export the gas but Iran has deterred awarding the rights of the field to the Indian firm owing to differences over pricing of the fuel.

With the deal on the verge of collapsing, OVL has offered to do just the upstream part of bringing the field to production while leaving the marketing of the fuel to Iran.