ONGC, Hinduja to invest $10 bn in Iran

NEW DELHI: State-run Oil and Natural Gas Corp and Hinduja Group plan to invest $10 billion for developing oil and gas fields in Iran, ONGC Chairman and Managing Director R S Sharma said on Wednesday.

"The development of Phase-12 of South Pars gas field and Azadegan oil field will cost $5 billion each," Sharma told reporters here.

ONGC Videsh Ltd, the overseas arm of ONGC, and Ashok Leyland Project Services Ltd, a unit of Hinduja Group, plan to sign an MoU with Naftiran Intertrade Co and Petropars Ltd.

"They (Iranians) are very interested. They are very satisfied with ONGC's competence, technical and financial capabilities and project execution," he said after OVL and Hinduja Group had initial talks with an Iranian delegation.

"We will begin due diligence for the two fields tomorrow," he said.

Iran does not give companies a stake in its oil and gas fields but signs buyback agreements where companies hand over operations of fields to NIOC after development and then receive payments from oil or gas production for a few years to cover their investment.

"It will be a service contract that we will be assured of oil and gas as our remuneration," Sharma said, adding that the company was expecting a return of at least 20 per cent on the investment in the fields.