Iranian doubts about IOC and ONGC

Vol 4, PW 5 (12 Apr 00) People & Policy

Is Iran serious about inviting Indian Oil Corporation (IOC) and ONGC into a consortium to develop an LNG project at its South Pars gasfield A source close to the National Iranian Oil Company (NIOC) thinks not.

"What does IOC know about the gas business" he tells Petrowatch," How can they bring the Indian market to us If it was GAIL, that would be different." In the past few weeks, IOC and ONGC have tried hard to get an equity stake in the South Pars consortium alongside the National Iranian Oil Company (NIOC), BHP Petroleum of Australia and Petronas of Malaysia. Chairman Bora of ONGC and Chairman Pathan of Iran have made several trips to Iran to press their case.

But Petrowatch learns that the Iranians are less than keen to include the two Indian companies and that promises to accommodate them have been made only, "to humour the Indian government". Teheran's disillusionment stems from reports that IOC and ONGC are unable to agree on the MOU for their Iranian venture, despite pressure from oil minister Ram Naik to speed things up.

"Lawyers from both companies don't even meet," learns Petrowatch. IOC is unhappy that ONGC wants to involve itself in the marketing of Iranian LNG in India.

IOC wants ONGC to restrict itself to the upstream side of the project only. Equally obstinate, ONGC wants a slice of the marketing pie.

"They both know the money is in the marketing," adds a source. Unless IOC and ONGC resolve this dispute soon, the Iranian opportunity - like so many before it - will be lost.

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