Despite India willing to invest as much as $11 billion to develop Iran's Farzad B gas field, the war of words between the two countries has only intensified with Tehran now saying that it is under no obligation to award the contract to India. Iran has also made light of India's threat to import less crude oil from it, with its Parliament Energy Commission chief saying Iran could find other customers for its oil.
In May, Iran signed a basic agreement with Russia's Gazprom for development of the gas field which was discovered by a consortium of Indian state-run companies. This was seen as retaliation against what Iran saw as a threat from India to cut purchase of Iranian oil if the commercial contract for Farzad B didn't happen. India officially said last month that it wants Tehran to reciprocate the faith shown by New Delhi in it as reflected in India's decision to buy substantial crude from Iran even when it faced international sanctions.
This was followed by a fresh offer earlier this month to invest $11 billion for development of the gas field. Iranian lawmaker and spokesperson of Iran's Majlis Energy Commission Asadollah Gharekhani said last week that while India had been allowed to conduct technical surveys on Farzad B, giving India development rights was never a part of any agreement. "In the past, it was decided that Iran and India jointly carry out (feasibility) studies on the Farzad B oil field. The studies have been conducted and have finished. However, no decision was made that would suggest the project to develop the field should necessarily be contracted out to India," Gharekhani was quoted as having told Iranian government's source.
"Under equal circumstances, this company (Indian consortium) could take priority. However, if there is a difference between the Indian company and other firms in terms of technology, technical knowhow and investment, Iran will, based on the independence and freedom that is has, choose the company which would best serve the country's national interests," he added. On India's decision to buy less crude from Iran, the official said Iran had actually suffered losses by allowing New Delhi to pay for the purchase in Indian rupees. India and Iran have failed to finalise a commercial contract for Farzad despite the optimism expressed by PM Narendra Modi and President Hassan Rouhani for the same when they met in Tehran last year.