Iranian president Hassan Rouhani’s visit appears to have smoothen the creases in bilateral energy ties that had developed over delayed Farzad-B gas field deal, with both sides going back to negotiating table as well as New Delhi agreeing to buy more Iranian crude and Tehran reciprocating by offering “good incentives”.
Looking beyond Farzad-B, India also used the new-found bonhomie created by Rouhani’s visit to seek stake for its state-run companies in Iran’s South Azadigan oil field to transform their crude buyer-seller relationship into that of strategic investors in each other's oil economy.
After a meeting between oil minister Dharmendra Pradhan and his Iranian counterpart Bijan Namdar Zanganeh on Saturday, both sides were brimming with positive vibes. “I am very optimistic about the future of relationship between the two countries and our companies, especially for developing oil and gas fields,” Zanganeh told reporters after his meeting.
He also expressed optimism on signing of an agreement awarding development rights for Farzad-B to ONGC Videsh Ltd, which had discovered the field a decade ago. “We agreed that next week the Indian team will come to Tehran for finalising some of the points.”
Pradhan reciprocated Zanganeh’s positive approach by saying Iran has given “good incentives” on crude oil exports to India. “It will be beneficial for India to buy more crude from Iran rather than from other countries. We have agreed that India will buy more oil from Iran in coming days.”
India has agreed its public and private sector refiners will raise their crude purchase by half a million barrels a day (or 25 million tonne) in 2018-19, marking an increase of 25% over the 370,000 barrels per day (18.5 MT) estimated for 2017-18. In 2016-17, India had imported 510,000 barrels per day (25.5 million tonne) of oil from Iran.