ONGC-Hinduja JV looses rights to develop Iran`s oilfield to China
New Delhi: In a major setback to India`s oil
diplomacy, the ONGC-Hinduja Group alliance has lost the rights
to develop Iran`s South Azadegan oilfield to CNPC of China.
The joint venture of ONGC Videsh - the overseas arm of
state-run Oil and Natural Gas Corp — and Hinduja Group firm
Ashok Leyland Project Services Ltd, was touted to get at least
45 percent stake in the 260,000 barrels per day South Azadegan oilfield but Beijing apparently offered multi-billion dollar soft loans to bag the rights, industry sources said.
The China National Petroleum Corp (CNPC) on Sunday signed
a contract with National Iranian Oil Co`s overseas subsidiary,
Naftiran Intertrade Co (NICO) in Lausanne, Switzerland to take
70 percent stake in the oilfield along the Iraqi border.
NICO, which held 90 percent stake in the field, would be
left with 20 per cent interest while Inpex of Japan would hold
the remaining 10 percent.
Sources said China has agreed to even contribute NICO`s
share of the USD 2.5 billion cost for developing the field
that holds an estimated 42 billion barrels of oil reserves,
one of the world`s largest finds in the last 30 years.
CNPC had in January won rights to develop the North
Azadegan oilfield and the Indian alliance was preferred for
the southern fields as Iran was said to be against giving the
entire block to one firm.
South Azadegan and Phase-12 of the giant South Pars gas
field in the Persian Gulf were two projects the Indian joint
venture was pursuing in Iran.
An official in the ONGC-Hinduja joint venture confirmed
losing South Azadegan oilfield to the Chinese but said the
development rights to Phase-12 of South Pars field were yet to
China, which has ignored western concerns over Tehran`s
nuclear programme, has secured several oil and gas projects in
Iran since 2005, including Yadavaran oilfield and preliminary
agreements for development of North Pars gas field and Phase-
11 of South Pars field.
Sources said China has used its vast foreign exchange
reserves - which are nearly double of India`s USD 1.1 trillion
GDP - to give loans to oil producing countries. This year it
has lent nearly USD 50 billion to Russia, Kazakhstan, Brazil
and Venezuela in return for oil supplies.
Iran is offering better fiscal terms like a 3 percent
higher rate of return on the investments in oil and gas
fields, to Chinese firms.
Indian firms, they say, are facing slight resistance as
New Delhi deterred on importing natural gas from Iran and has
made statements asking the Ahmednijad regime to fulfil its
obligations as a signatory to the Nuclear Non-proliferation
Also, while Pakistan has gone ahead and signed an
agreement on buying gas through the long-delayed
Iran-Pakistan-India gas pipeline, New Delhi continues to play
from the sidelines.
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