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MEOG NEWS IN BRIEF MEOG

by Israel’s military. Tuesday’s agreement, the The 3,500 square kilometre Farsi block sits SERVICES
financial details of which weren’t disclosed, in water depth of 20-90 metres on the Iranian
will also allow traders to transport oil from side of the Persian Gulf. Aramco suspends second
the Mediterranean and Black Sea regions to OVL, with 40 per cent operatorship
Asia, EAPC said. MED-RED Land Bridge is a interest, signed the Exploration Service Shelf Drilling rig
consortium of UAE and Israeli companies. Contract (ESC) for the block on December
BLOOMBERG 25, 2002. Other partners included Indian Oil Saudi Aramco has suspended the contract for
Corp (IOC) with 40 per cent stake and Oil the Main Pass I jack-up for up to 12 months,
India Ltd (OIL) holding the remaining 20 per Shelf Drilling has reported.
GAS cent stake. The drilling company said the suspension
OVL discovered gas in the block, which at a zero dayrate was effective as of October
India set to lose Farzad-B was declared commercially viable by NIOC, 2020. It will automatically extend the term
on August 18, 2008. The exploration phase of
of the contract for a period equal to the
gas field in Iran the ESC expired on June 24, 2009. suspension period.
Shelf does not reveal dayrates. The rig had
The firm submitted a Master Development
India has all but lost the ONGC Videsh Ltd- Plan (MDP) of Farzad-B gas field in April been due to go out of service in the fourth
discovered Farzad-B gas field in the Persian 2011 to Iranian Offshore Oil Company quarter of this year or first quarter of next
Gulf after Iran decided to prefer domestic (IOOC), the then designated authority by year.
companies over foreign firms for development NIOC for development of Farzad-B gas field. Aramco similarly suspended the High
of the field, sources said. A Development Service Contract (DSC) Island IV rig in mid-June.
ONGC Videsh Ltd (OVL), the overseas of Farzad-B gas field was negotiated till Speaking during the company’s conference
investment arm of state-owned Oil and November 2012, but could not be finalized call in August, Shelf’s CEO David Mullen said
Natural Gas Corp (ONGC), had in 2008 due to difficult terms and international the company had agreed to provide temporary
discovered a giant gas field in the Farsi sanctions on Iran. dayrate discounts for Aramco and the United
offshore exploration block. In April 2015, negotiations restarted with Arab Emirates’ Adnoc.
OVL and its partners had offered to invest Iranian authorities to develop Farzad-B gas “We continue to see the Middle East is
up to USD 11 billion for development of the field under a new Iran Petroleum Contract more impacted than I would have imagined
discovery, which was later named Farzad-B. (IPC). This time, NIOC introduced Pars … that’s prompted by Aramco having taken
After sitting over OVL’s proposal for Oil and Gas Company (POGC) as its a decision to wind back their activity. They’re
years, the National Iranian Oil Co (NIOC) representative for negotiations. not cancelling contracts. They’re looking at
informed the firm in February this year From April 2016, both sides negotiated to ways to suspend contracts because they see
about its intention to conclude the contract develop Farzad-B gas field under an integrated this as a temporary measure, but it remains to
for Farzad-B development with an Iranian contract covering upstream and downstream, be seen how long it lasts,” Mullen said at the
company, sources with direct knowledge of including monetization/marketing of time.
the development said. the processed gas. However, negotiations He went on to suggest discounts were of
OVL, however, continued its engagements remained inconclusive. around 10%. Mullen linked Aramco’s desire
with NIOC over the development of the Meanwhile, on the basis of a new studies, for cost controls to its newfound obligations to
field and sought terms and conditions of the a revised Provisional Master Development pay dividends. As such, he suggested another
proposed contract for its evaluation, they said, Plan (PMDP) was submitted to POGC in round of suspensions may come in the second
adding that Iran has so far not responded to March 2017, sources said, adding that in half of the year, a suggestion now coming true.
the Indian firm’s request. April 2019, NIOC proposed development of “[Aramco is] trying to work in a way where
Farzad-B holds total reserves of around the gas field under the DSC and offtake of they’re not picking on any one contractor in
21.7 trillion cubic feet of which around 60 per raw gas by NIOC at landfall point. However, particular. They’re — as they say it, they’re
cent is recoverable, and production is slated to due to imposition of US sanctions on Iran sharing the pain across the companies that
be around 1.1 billion cubic feet per day. in November 2018, technical studies could work for them. So you can safely assume what
Sources said unconfirmed information not be concluded which is a precursor happens to one is happening to pretty much
suggests that Iran has identified a local firm for commercial negotiations. The Indian all the contractors within Aramco.”
for the development of the field, but OVL has consortium has so far invested around USD ENERGY VOICE
not yet given up hopes and continues to chase 400 million in the block.
Iranian authorities for the contract. HINDUSTAN TIMES

P20 www. NEWSBASE .com Week 42 21•October•2020