Will India grab the 90-days offer by Iran? Perhaps not!

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Iran President Ebrahim Raisi and PM Narendra Modi at SCO meeting in Samarkand on September 17. Courtesy: ANI

By Haider Abbas

Iran has natural gas to an extent that it can supply gas, to the whole of India, for more than 500 years, and since, the last quarter of a century, this probable possibility has been ‘only up’ to a level of discussion. There were proposals of an Iran-Pakistan-India gas pipeline but that has remained impossible, owing to the difficult India-Pakistan relations. However, the Russian-Ukraine war, since February, has given rise to new possibilities as despite the US and EU sanctions, the Russian economy has remained rock-solid, solely owing to its selling of its ‘oil and natural-gas’ to the world, including Europe and to India as well.

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Iran, which has been marred by US sanctions for decades, yet could survive only due to its ‘oil and gas’, mostly sold through grey-market, has renewed its offer to India, which is a market of over a billion people, to sell its natural-gas to India, as Economic Times 1 on September 26 has reported that ‘Iran offers Indian firms 30 per cent stake in gas field.’ It is the same gas-field, called Farhad-B, from which India had once been shunted-out, in the year 2000-21, as Iran had calculated that Russia would invest in it, but since Russia did not comply, Iran is reverting back to India again. Iran’s has given offer to Oil and Natural Gas Corporation Videsh Limited, the international arm of ONGC, to start a joint-collaboration with Iran, but, that India needs to grab the offer in the coming 90-days. The big question is will India accept it? Iran holds the second largest gas reserves in the world, after Russia, and many of its gas-reserves are even yet to be discovered.

The Iranian offer is fraught with ‘many considerations’ as India is to reflect, over the usage of natural-gas, for as yet, India has not been able to accomplish itself to ‘its need for natural gas’, despite the fact that through natural-gas large scale electricity may be produced, it can be used in industries and automobiles, for household cooking needs etc and also for the warmth in the winters, on which the entire Europe relies. Certainly if India goes ahead with it, it might revolutionize the whole living-standards inside India, as through it India would then be able to cut heavily into its energy costs, in industry and infrastructure etc.

The reality has struck Iran as Russia, embroiled in a war, will not be able to invest in Iran in any near future, hence, Iran has forwarded the offer to India, but India had once ‘cut a sorry figure’ as India had gone too ahead to discover untapped Iranian gas reserves but was ousted from it abruptly by Iran, and Iran had even claimed that it would develop Farzad-B field all on its own, was reported by The Hindu 2 on May 17, 2021. Iran had also referred that it was under no obligation to give-the-deal to India, reported TOI 3 on July 31, 2017. In fact India was to have been the first to bag this project, which was underway since around 2005, but Iran gave India a very curt-shoulder, hence, this time around India will need to weigh-into all the aspects, as who knows that tomorrow Iran might start to take any other stringent posture? India had intended to invest as much as 11 billion USD but had to retract it, reported TOI 4 on July 3, 2017, but a month later everything had come on a grinding halt. May be, as analysts are putting into, that the ‘stakes-sharing’ between the two countries could not be ironed -out.

The India’s ‘walking-out’ from Farzad-B project also had come owing to US sanctions on Iran, after reports of Iran’s involvement of Uranium enrichment had started to hog the limelight. The sanctions, by extension, were to have been implemented on India too, hence, why would India hazard its prospects? It is another matter than India is a nuclear power too, and US sanctions on India after its nuclear-blasts, could not deter India’s economy.

However, US too stepped-down from its earlier stance and a Joint Comprehensive Plan for Action, in 2015, was mooted and Iran and US entered into a deal, after which Iran had stopped its Uranium enrichment programme. India and Iran could have then gone ahead with this Farzad B project but internal-logistics i.e. profit sharing, project duration etc ‘mattered-more’ and the project died-out. India, reported Iranian media, had insisted for a 30-years contract, which Iran did not agree too. Later, the US President Donald Trump put the most hard-sanctions on Iran, which made India with back-off fully from Farzad-B protect.

The then Iranian Oil Minister Zanganeh (2013-21), alleged that India wanted a 30-years contract. Courtesy: Twitter.

Subsequent to Trump’s sanctions on Iran, which annulled even oil supplies to India, yet there was a growing realization that India, which had enthusiastically worked with Iran in Farzad-B, also does have energy needs and its loss to India was to be a wake-up call to Indian needs, as discussed MoneyControl 5 on October 24, 2022, which signaled that in order to ‘capitalise on the opportunities in a changing world, New Delhi needs to be nimble as never before; the country can no longer afford the sloth and dithering which has too often characterised Indian diplomacy.’ Giving a positive sign to Iran.

India no doubt has its needs and Iran wants to engage with India too, but there is a whole issue of geo-politics around Iran with reference to Israel and US, as Israel would never like India ‘investing’ in Iranian gas, and US and Israel are the strongest allies in the region, while India is also a strong ally with Israel and with US too, hence, India looking-the-other-way to US and Israel, while getting-close to Iran, does not seem to be any probability as of now. This is to try on Iranian nerves more, as Iran on its own end has been left high-and-dry due to Russia, on which Iran had once hugely banked-upon, as Iranintl 6 lamented on September 22, that ‘Russia never invested ‘a penny’ in Iran’s energy sector’. Let’s see if India grabs the offer.

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The writer is a former UP State Information Commissioner and writes on international politics.

References:

1-https://energy.economictimes.indiatimes.com/news/oil-and-gas/iran-offers-indian-firms-30-pc-stake-in-gas-field/94442935

2-https://www.thehindu.com/news/international/iran-to-develop-farzad-b-gas-field-domestically-dumps-india/article34581669.ece

3- https://timesofindia.indiatimes.com/business/india-business/farzad-b-gas-field-row-not-obligated-to-give-deal-to-india-says-iran/articleshow/59838733.cms

4- https://economictimes.indiatimes.com/industry/energy/oil-gas/india-gives-iran-11-billion-best-offer-on-farzad-b-gas-field/articleshow/59421577.cms?from=mdr

5-https://www.moneycontrol.com/news/business/loss-of-farzad-b-field-in-iran-isnt-a-calamity-for-india-but-it-should-be-a-wake-up-call-6006331.html

6-https://www.iranintl.com/en/202209264705

 

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