|Iran offers India to sign PSA contract||
Iran has offered India to sign a production sharing contract of PSA type on gas block Farsi in a span of three months, Indian newspaper "Business Standard" reported.
Thus, Tehran is ready to accept a 100 percent payment of the price of Iranian oil import through rupees.
Due to sanctions, India has to make payments for Iranian oil imports through rupees - a currency which is facing increasing devaluation.
According to the newspaper, under the revised plan, the development of the field will require an investment of more than six billion dollars.
"Now, since we are in the need for more Iran imports, Iran is bargaining. They want us to sign the production sharing contract for Farzadb gas field in Farsi block soon," the newspaper quoted a senior official of Iran's Oil Ministry.
Earlier, Iranian oil Minister Bijan Zanganeh has said the contracts in oil and gas sector will be revised to increase the recovery rate of the country's active fields.
It was previously announced that Iran plans to adjust country's oil contracts in order to "make the contracts more attractive to foreign companies".
Iran has had experiences in buy-back and ordinary contracts with foreigners, however none of them motivated the contractors to have a firm responsibility and interest in recovery rate of a field.
However, previously, Business Standard had reported that Iran is likely to reject India's offer to go for 100 percent rupee payment through UCO Bank in return for crude imports. The oil ministry was targeting to bring down forex outflow by about $8.47 billion payment for 11 million ton of Iran crude in rupee.
Production sharing agreements can be the most interesting kind of contract for foreign investors who wish to do business in Iran.
Under the agreement, the investor company and the government will share the resources extracted from the project. Iran is very careful about the ownership of its oil and gas fields but it has announced that it will study this kind of contract for joint fields as well.
ONGC Videsh Ltd (OVL), Indian Oil Corp. Ltd (IOC) and Oil India Ltd (OIL) had won the Farsi gas block (offshore Farzad B) in 2002 from National Iranian Oil Company.
While OVL and IOC have 40 percent each, OIL holds 20 percent stake in the block, however, after over a decade-longed delay, Iran canceled the agreement.
The field is located in 90 kilometers of the Iranian port city of Bushehr, and covers a total area of ??3.5 thousand square meters. The fourth of the drilled wells, which reached depths of 3,400 meters revealed the presence of gas reserves in the field.
Farzadb field is estimated to hold 21.68 trillion cubic feet reserves which of 12.8 tcf (above 362 bcm) is recoverable.
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