Iran Steps Up The Gas On Oil Ties With India

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New Delhi, May 16: : Co-operation between India and Iran on the oil front is all set for a major upswing in the post-Saddam scenario. Iranian oil authorities are eager to develop specific projects with India. One key area on offer is long-term contracts in the hydrocarbon sector.

Senior petroleum ministry officials, who have just returned from Tehran early this week as part of a high level delegation led by petroleum minister Ram Naik, found the Iranians quite keen to enter into exclusive contracts with India for sale of oil and gas.

“Iran seems to be in a hurry to secure as many as long-term contracts from energy deficit countries like India. This is because it is surrounded by the two US-dominated countries, with Iraq on one side and Afghanistan on the other. Iraq has the world’s second largest reserves of oil. The fact that all future exploitation of oil and gas and its pricing in Iraq will (may) now be decided by the US, it is feared that US strategy in Iraq may make the role of the Organisation of Petroleum Exporting Countries irrelevant,” an official told FE.

For Tehran, one thing is certain. Even if oil is not America’s prime motive in confronting Iraq (as some critics of US president George Bush allege), oil and gas figure centrally in Washington’s plans.

Some specific contracts between India and Iran would include exports of five million tonne of LNG from Iran to India, awarding discovered oil fields in Iran to ONGC Videsh Limited, participation of Indian Oil in setting up aviation services at its international airports and co-operation with Gail India Limited in developing CNG infrastructure in Iran.

Iran has huge reserves of oil and gas and two third of its revenue comes from the sale of oil and gas. At present, it produces around 3.59 million barrels of oil per day. It has 5 per cent of the world’s crude oil and 14 per cent of natural gas reserves. Oil reserves in Iran are estimated at 88,200 million barrels.

After Russia, Iran has the second largest natural gas reserves in the world, estimated at 23 trillion cubic metres. Such vast amounts of reserves have enhanced its position in the world energy market. Iran needs to find export markets and India has emerged as an important gas consuming country.