Wed May 31, 2017 10:32AM
Iran’s Petroleum Minister Bijan Zanganeh says the country has signed a basic agreement with Russia’s Gazprom over the development of Farzad B gas field.
Iran’s Petroleum Minister Bijan Zanganeh says the country has signed a basic agreement with Russia’s Gazprom over the development of Farzad B gas field.

Iran says it has signed a basic agreement with Russia’s energy giant Gazprom over the development of Farzad B gas field – a project which the country has for long been negotiating with an Indian consortium.    

The announcement over Farzad B agreement was made by Iran’s Petroleum Minister Bijan Zanganeh.

Zanganeh was quoted as saying in an interview with Argus energy publication that Iran had signed two other basic agreements with Gazprom over the development of North Pars and Kish gas fields.

The three could give Gazprom a strong foothold in Iran’s gas industry once finalized.

Meanwhile, Indian media said Iran’s awarding Farzad B to Gazprom was in retaliation for New Delhi’s recent move to cut purchases of Iranian crude oil.

The volume cuts would put India's imports of Iranian crude for this fiscal year at 3,70,000 barrels per day (bpd), India’s media reported.

The reduction reportedly was itself in response to Iran’s failure to award the rights to develop Farzad B to an Indian consortium led by ONGC Videsh Ltd. (OVL). 

India is Iran's top oil client after China, and last year imported about 5,10,000 bpd of crude from the country, according to shipping data provided by Reuters.

The reduced 2017/2018 imports include 1,99,000 bpd by state refiners, a decline of about a third from last year, Reuters quoted market sources as saying. Private refiners Essar and HPCL-Mittal Energy Ltd (HMEL) have renewed last year's term contracts to buy 1,20,000 bpd and 20,000 bpd from Iran, respectively, India’s media reported.

Meanwhile, Reuters quoted analysts as saying in a report that apart from row over Farzad B, India was also taking advantage of a narrow price spread between European oil benchmark Brent and Middle East price-setter Dubai crude, which makes it attractive to bring more oil from Europe into Asia.