Page 9 - MEOG Week 50
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MEOG
ProJeCts & ComPanies MEOG
 to the final cabinet-approved list.
The Lebanese Exclusive Economic Zone
(EEZ) is delineated into 10 concession areas.
In contrast to the first bid round the prequali- fication and bidding stages have been combined, with a deadline for submissions set at January 31,
2020.
The first bid round closed last year with some
disappointment, as only the aforementioned consortium had submitted offers for blocks.
Like Block 9, Blocks 8 and 10 lie in the south of the EEZ and within the area of contention with Israel and are also likely to provoke objec- tions from Tel aviv as with the awarded licence.
Block 5 covers uncontested territory to the north of Block 8, while Blocks 1 and 2 are in the north of the EEZ and include portions of a
400-square km area disputed with neighbouring Syria. all three southern blocks were previously deemed prospective primarily for gas, while Block 1 was marketed as more likely to yield oil.
Last month, the LPa noted that the country’s EEZ covers 22,700 square km, with the blocks accounting for 17,506 square km. To date, 14,000 square km of 2D seismic and 15,000 square km of 3D seismic have been shot.
With only two months left for bids to be sub- mitted, Beirut will be hoping to improve upon the results of the first auction, though with neigh- bouring Israel and Cyprus having struggled to bring about the swift development of sizeable assets in their EEZs, most prospective bidders would prefer to see the results of the upcoming drilling campaign before committing.™
  Iran pushes forward with Farzad-B with local firm
 iran
IRaNIaN Oil Minister Bijan Zangeneh said this week that local firm Petropars had been chosen to carry out engineering, exploration and basic design work at the offshore Farzad-B gas field in the Persian Gulf.
Zangeneh noted that the firm, which is known for its involvement in the supergiant South Pars, had signed a contract with the National Iranian Oil Co. (NIOC) for the devel- opment of Farzad-B. He added that this had now been given the green light by the board of NIOC.
The field is estimated to hold 21.7tn cubic feet (615bn cubic metres) of in-place gas reserves, of which 12.5 tcf (354 bcm) is recoverable. The asset was discovered by an Indian consortium – com- prising ONGC Videsh Ltd (OVL), Indian Oil Corp. (IOC) and Oil India Ltd (OIL) – under an exploration service contract that expired in 2009, after the field was declared commercial.
Since then, the Indian consortium has been unable to win the developments rights for the field. Last year, OVL, the overseas arm of state- owned Oil and Natural Gas Corp. (ONGC), made a revised offer to spend around $11bn in developing Farzad-B, a cost which included building the infrastructure to export the gas.
at that time, Iran deferred the decision, owing to the cost involved for the development, saying that the upstream development com- ponent should cost no more than $5.5bn. The Indians insisted that the minimum cost for the upstream segment alone would be $6.2bn, with another $5bn or so required to build a connected LNG export facility.
The Indian side also objected to Iran’s demand that India buy all of the natural gas produced
from the Farzad-B block at a price equivalent to the rate Qatar charges for selling LNG to India under a long-term deal – $7 per million British thermal units (mmBtu).
In the current global market, this equates to around three times the price of the $2.3 per mmBtu that OVL is willing to pay. at the same time, Iran developed the idea of developing the field with Russia – via Gazprom – as part of the multi-billion dollar investment package agreed last November.
In Q1 2018, Tehran dithered over whether to resume collaboration on the asset with Indian companies or to award a deal to Gazprom. How- ever, the difficulties faced by overseas firms in doing business with Iran amid US sanctions have kept the project in limbo since.
The Indian consortium was reported to have offered a price of $3-4bn for the entire upstream part of the development.
Meanwhile, Rouhani said this week that investment of $75mn would be made in Farzad-B by “tapping the domestic resources of NIOC in the first phase”. The remaining capital for financing the project is expected to be pro- cured under buyback or integrated petroleum contract (IPC) terms.™
    Week 50 18•December•2019 w w w . N E W S B A S E . c o m P9







































































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