India may lose Farzad B gas field bid: 

India may lose Farzad B gas field bid: 

Context

• Iran miffed as India not ‘flexible’ on pricing; quality of gas a concern, says petroleum ministry official

What is Farzad B gas field?

• The Farzad B gas field is an Iranian natural gas field that Indian companies discovered the in 2008
• It is located in Persian Gulf within territories of Iran and produces natural gas and condensates.
• Indian government is trying to negotiate a deal to get rights to dig oil.

Why is it important for India?

• India offered $11bn to develop Iran’s Farzad B gas field.
• The total in place reserves of the Farzad B gas field are around 21.7 trillion cubic feet of which around 60 percent is recoverable
• India is the world’s fourth-largest LNG buyer due to its spur use of cleaner-burning fuels
• Even as Iranian government officials have said that India is close to losing its bid for the Farzad B gas field, Indian officials in the Petroleum Ministry downplayed the situation, saying it is all part of the negotiation process.

What is the present status of the negotiations?

• Iran’s Ministry of Petroleum has started preliminary talks with Russians to develop Farzad B but negotiations also continue with the Indian government
• Majlis Energy Commission stated that there is no clause which mentions that the contract would ultimately be awarded to India

India- Iran Bilateral Relations

• India has worked hard to maintain its ties with Iran when there were international sanctions on Iran from all sides. Bilateral trade with Iran suffered due to banking and insurance censures
• In 2015, India liberalized its visa policy for Iran and struck it off the prior referral category (PRC) of countries.
• Iran can be the key supporter of India in the wake of the growing influence of terror groups such as the Islamic State.
• India lined up USD 20 billion as investment in oil & gas, petrochemical and fertilizer projects in Iran.
• In May 2016, PM Modi visited to Iran, where the historic Chabahar port agreement was signed which is a contract for the development and operation of the port for 10 years of 2 terminals and 5 berths.
• There was a MoU on provision of services by Indian Railways, including financing $1.6 billion, for Chabahar-Zahedan railway line.
• India will invest in setting up industries from aluminum to urea plants in Chabahar.