With negotiations stuck over pricing of natural gas, ONGC Videsh ltd has offered to invest $6.2 billion in development of Iran's giant Farzad-B gas field in the Persian Gulf while leaving the marketing of gas to Tehran.
OVl had last year made its 'best' offer to spend $11 billion in developing the Farzad-B field as well as in building the infrastructure to export the gas but Iran has deterred awarding the rights of the field to the Indian firm owing to differences over pricing of the fuel.
With the deal on the verge of collapsing, OVl has offered to do just the upstream part of bringing the field to production while leaving the marketing of the fuel to Iran, sources privy to the development said.
India is hoping for a breakthrough on the deal during Iranian President Hassan Rouhani's maiden visit here from today. According to OVl, the upstream part is to cost $6.2 billion while another $5 billion will be required to build a liquefied natural gas (lNG) export facility.
Sources said that while Iran believes the upstream investment should not be more than $5.5 billion, it wants India to buy all of the natural gas produced from the Persian Gulf block at a price equivalent to the rate Qatar charges for selling lNG to India under a long-term deal.