In­dia Looks to Deepen En­ergy Ties with Iran

Dur­ing his Tehran visit, Prad­han to dis­cuss plans to buy more oil, set­tling pay­ment is­sues

The Economic Times - - Economy - Di­pan­janRoy.Chaud­hury @times­

New Delhi: Oil min­is­ter Dhar­men­dra Prad­han will visit Tehran on April 9-10, hop­ing to ex­pand en­ergy co­op­er­a­tion in the first visit by an In­dian min­is­ter to Iran since West­ern sanc­tions were lifted from the Per­sian Gulf coun­try.

His agenda will in­clude ONGC’s par­tic­i­pa­tion in de­vel­op­ing the Farzad-B gas field, buy­ing ad­di­tional crude oil and set­tling pend­ing pay­ments for ear­lier oil pur­chases from Iran. Prad­han will also dis­cuss projects, in­clud­ing petro­chem­i­cal and fer­tiliser plants in the spe­cial eco­nomic zone at Chaba­har port, au­thor­i­ta­tive sources told ET.

For­eign min­is­ter Sushma Swaraj will fol­low Prad­han, likely on April 17-18, to push po­lit­i­cal ties on the heels of Prime Min­is­ter Naren­dra Modi’s Saudi trip as In­dia strives to bal­ance its ties with Riyadh and Tehran.

Iran’s for­eign min­is­ter, eco­nomic devel­op­ment min­is­ter and deputy for­eign min­is­ter have vis­ited In­dia af­ter Tehran signed a his­toric nu­clear deal with the world pow­ers, creat­ing a huge in­vest­ment and mar­ket op­por­tu­nity. With Iran emerg­ing as In­dia’s prin­ci­pal gate­way to Cen­tral Asia, Rus­sia and Europe, the Modi gov­ern­ment hopes to give the partnership a push with the high-level vis­its. Con­nec­tiv­ity projects within Iran and link­ing the re­gion, be­sides de­mand for en­ergy, are driv­ing In­dia’s pol­icy to­wards Iran, sources here pointed out.

“The Farzad-B gas field, pur­chase of oil from Iran and in­vest­ment in petro­chem­i­cals will be the most im­por­tant topic of dis­cus­sions,” Ira­nian deputy petroleum Min­is­ter Amir-Hos­sein Za­maninia told re­porters in Tehran on Mon­day. A con­sor­tium led by In­dia’s Oil & Nat­u­ral Gas Cor­po­ra­tion dis­cov­ered Farzad-B in 2008 but was un­able to pro­ceed due to the sanc­tions. Last year, ONGC sub­mit­ted a $3-bil­lion pro­posal to Tehran for devel­op­ment of the field.

The Farzad-B field in the off­shore Farsi block is es­ti­mated to hold 12.8 tril­lion cu­bic feet of gas. Last month, Prad­han said he was “hope­ful” that a deal on Farzad-B could be con­cluded dur­ing his visit to Tehran.

“In Iran, our pri­mary in­ter­est is in E&P (ex­plo­ration and pro­duc­tion). We have old en­gage­ments with Iran and we con­tin­ued to buy oil from Iran in dif­fi­cult times,” he had told re­porters ear­lier. Sources in the Ira­nian gov­ern­ment gave an in­di­ca­tion to ET that a deal on Farzad-B may take time. Ex­press­ing a sim­i­lar sen­ti­ment, Za­maninia said: “Ne­go­ti­a­tions about the Farzad-B field are a bit time-con­sum­ing.”

The is­sue of In­dia’s pend­ing pay­ments for oil im­ported from Iran for three years dur­ing the pe­riod of sanc­tions will also fig­ure in Prad­han’s de­lib­er­a­tions.

Za­maninia said the Cen­tral Bank of Iran is cur­rently ne­go­ti­at­ing with In­dia and Prad­han will meet bank gover­nor Vali­ol­lah Seif to dis­cuss the is­sue. Ac­cord­ing to Seif, In­dia wants to pay an out­stand­ing amount of $6 bil­lion in ru­pees, while Iran is seek­ing the pay­ment in euros.

Ac­cord­ing to the Ira­nian gov­ern­ment, the three-year-old mech­a­nism of pay­ing 45% of the oil im­port bill in ru­pees and keep­ing the re­main­ing 55% pend­ing for pay­ment chan­nels to clear has con­cluded.

Prad­han will also meet Ira­nian min­is­ter of in­dus­try, mines and trade Mo­ham­mad Reza Ne­matzadeh and the sec­re­tary of the coun­cil of Iran’s free trade, in­dus­trial and spe­cial eco­nomic zones Ak­bar Torkan to dis­cuss set­ting up com­plexes in the Chaba­har port SEZ. Sources in the Ira­nian gov­ern­ment who did not wish to be iden­ti­fied said In­dia’s pres­ence in Chaba­har has rat­tled a sec­tion in the Pak­istani es­tab­lish­ment.

For­eign min­is­ter Sushma Swaraj to fol­low Prad­han on April 17-18 to push po­lit­i­cal ties ahead of PM’s Saudi trip

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