• India to boost investment in Iranian oil and gas sectors

    India and oil-rich Iran today on Sunday to significantly expand engagement in their overall ties, particularly in boosting Indian investment in joint ventures in oil and gas sectors in the Persian Gulf nation where foreign investors from major economic powers are rushing in to get early footholds after lifting of nuclear sanctions. In talks between external affairs minister Sushma Swaraj and her Iranian counterpart Mohammad Javad Zarif, the two sides agreed that pending agreements such as Preferential Trade Agreement, Double Taxation Avoidance Agreement and Bilateral Investment Treaty should be concluded on a priority basis to spur trade and investment.

    Enhancing energy cooperation and development of the Chabahar port were the centrepiece of their talks which were mostly dominated by economic issues. “The talks were very successful and would give new energy to our centuries old ties with Iran. In particular, the economic partnership will get considerable fillip as a result of today’s forward looking talks,” ministry of external affairs spokesperson Vikas Swarup told PTI.

    People familiar with the matter said the issue of Kulbhushan Jadhav was not at all raised by the Iranian side. Jadhav was reportedly arrested in Balochistan after he entered from Iran and was accused by Pakistan of planning “subversive activities” in the country. Both sides discussed the progress on the Chabahar project and agreed that the commercial contract on Chabahar as well as the modalities for extending $150 million credit for Chabahar Port should be signed in the “very near future”.

    Decisions on this line of credit, as well as $400 million credit line for supply of steel rails from India have already been taken by India. Swarup said both sides discussed the energy partnership and Iran invited greater Indian participation in its oil and gas sector. “Iran said it would be happy to participate in the refinery sector in India.” On the Farzad B oil field project, both sides took note of the constructive discussions held during the recent visit to Iran of oil minister Dharmendra Pradhan. “The Indian side welcomed the Iranian decision to keep the Farzad B field outside the auction basket. The concerned companies have been directed to complete their contractual negotiations in a time bound manner. Iranian side had earlier communicated their gas pricing formula and expressed their desire for Indian investment in the Chabahar SEZ,” he said.

    “In terms of connectivity, Iran said it supported India’s desire to join the Ashgabat Agreement. The two ministers reviewed the progress made in the International North South Transport Corridor. IRCON from India would be visiting Iran for discussions on the Chabahar–Zahedan Railway link,” said the spokesperson. On trade and investment, the two sides agreed that with the lifting of sanctions, the potential for expanding these ties was immense. “They agreed that pending agreements such as Preferential Trade Agreement, Double Taxation Avoidance Agreement and Bilateral Investment Treaty should be concluded on a priority basis,” said Swarup.

    Oil minister Dharmendra Pradhan had paid a two-day visit to Tehran from 9 April during which he discussed a range of issues relating to stepping up of engagement in oil and gas sectors. The two sides also reviewed the implementation of the Chabahar port project in which India is a key partner. Swaraj and Zarif also reviewed implementation of the decisions taken by the two countries during the last joint commission meeting in December.

    The two ministers also deliberated on situation in Afghanistan and in Syria besides other regional issues. New Delhi is looking to increase engagement with the sanction-free Iran by raising oil imports and possible shipments of natural gas. It also wants rights to develop Farzad B gas field in the Persian Gulf discovered by ONGC Videsh Ltd (OVL). People familiar with the matter, however, said a deal for the field was not signed during Pradhan’s visit as Iranian Parliament, Majlis, is yet to approve the new Iran Petroleum Contract (IPC) under which the Farzad B field is to be given to the OVL-led consortium.

    Indian firms have so far shied away from investing in Iran for the fear of being sanctioned by the US and Europe. The same was deterring New Delhi from claiming rights to invest nearly $7 billion in the biggest gas discovery ever made by an Indian firm abroad. But after the lifting of sanctions, India is making a renewed pitch for rights to develop 12.8 trillion cubic feet of gas reserves OVL had found in 2008. Pradhan also conveyed to the Iranian side that both countries must expand the basket of oil and gas trade. He had expressed India’s interest in importing liquified petroleum gas (LPG) from Iran and said companies from both sides could discuss setting up an extraction plant in Chabahar, if required. 

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