ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp (ONGC), has qualified to bid for oil and gas development projects in Iran.
OVL is among the 29 international oil companies from more than a dozen countries that Iran has pre-qualified to bid in the upcoming tender for oil and gas projects, according to the list put out by National Iranian Oil Co (NIOC).
Others on the list include Royal Dutch Shell Plc, China National Petroleum Corp (CNPC), Total SA of France, Russia's Gazprom and Eni of Italy.
Iran, the holder of world's fourth-largest oil reserves and OPEC's third-largest oil producer, is hoping to attract as much as USD 150 billion in foreign investment in its oil, gas and petrochemicals sectors over the next few years.
The list of pre-qualified firms also included Malaysia's Petronas, Russia's Lukoil, China's CNOOC and Sinopec, Inpex of Japan, KOGAS of Korea. Most of these companies have been involved in Iran's oil industry projects before the US-tailored sanctions were imposed against the country in 2011.
Newcomers include Wintershall from Germany, Maersk from Finland, DNO from Norway and CEPSA from Spain, according to the NIOC list.
US oil services provider Schlumberger Ltd was also among those identified, according to the NIOC website.
OVL is already present in Iran. In 2008, it had discovered the Farzad-B gas field in the Farsi block in Persian Gulf. The discovery has an in-place gas reserve of 21.7 trillion cubic feet, of which 12.5 tcf are recoverable.
"We are in negotiations with Iran for development rights of Farzad-B field," a senior company official said.
"Discussions on continuing a development plan that we submitted to Iranian authorities. We are hoping negotiations will continue soon."
Gas produced from the field can either be converted into LNG by freezing at sub-zero temperature and shipping in cryogenic ships to India or transported through a pipeline -- via overland passing through Pakistan or sub-sea.
The official said the OVL will definitely look at participating in the bid round that Iran will hold using a new, less restrictive Iran Petroleum Contract (IPC) model.
The IPC model ends a buy-back system dating back more than 20 years under which Iran did not allow foreign firms to book reserves or take equity stakes in Iranian companies.
Under a buyback deal, the host government agreed to pay the contractor an agreed price for all volumes of hydrocarbons the contractor produces.
But now, NIOC will set up joint ventures for crude oil and gas production with international companies which will be paid with a share of the output.
Also, different stages of exploration, development and production will be offered to contractors as an integrated package, with the emphasis laid on enhanced and improved recovery.
The new IPC is said to be more flexible terms that take into account oil price fluctuations and investment risks.