TEHRAN (Fars News Agency)- Oil and Natural Gas Corporation (ONGC) and the Hinduja group could not close a deal with Iran for developing oil and gas fields in Iran in return for Iran getting a stake in an LNG terminal and refinery projects in India.
The tripartite negotiations would resume again but it is not known when it will take place though it is likely to be hosted by Iran. Yet, the two countries reached an agreement on the exploration of Farsi block. As the onus there was on Indian company ONGC Videsh Ltd (OVL), official sources said drafts of heads of agreement would now be sent back and forth between India and Iran.
The total project cost involving upstream and downstream segment is roughly $20 billion. OVL carried out the talks on behalf of its parent ONGC.
Sources said the Iranians were not willing to Indian companies' insistence on a higher rate of return though they dismissed any geo-political considerations coming in the way of Iranians agreeing to Indian participation in their country.
"After all Japanese, Chinese, French and other European companies are doing oil business with Iran. The only problem is with regard to US sanctions that makes banking formalities difficult," said a source.
When contacted, RS Butola, managing director, OVL, said, "We would not like to comment." Senior executives from OVL and Hinduja's Ashok Leyland Project Services met representatives of Iran's state-run Petropras and Naft Iran Intertrade Co Ltd (NICO), a subsidiary of National Iranian Oil Co, on Wednesday and Thursday.
Subir Raha, executive vice chairman of Hinduja Group India, on his part, told DNA Money, "Negotiations will continue, we will meet shortly." He said the two sides would need to resolve issues within their companies.
The two sides have yet to finalize gas pricing, project cost and supply commitment from Iran.
ONGC and the Hinduja Group are looking at joining the development of the South Pars phase 12 gas field and the Azadegan oil field in Iran. ONGC has offered the Iranian firms an equity stake in its proposed refinery and a liquefied natural gas terminal in Southern India, which Hinduja Group will also be involved in. ONGC plans to build a 300,000 barrels-a-day refinery in Andhra Pradesh and a 7.5 million ton LNG terminal in Karnataka.
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