Desperation is making China and India to search for oil and gas and connect with one another again.
ONGC arm, Chinese giant near deal with Iran on Yadavaran fields.
NEW DELHI: China and India may be competitors in most things but when it comes to the search for oil and gas, desperation is making the two try and connect with one another again.
China Petrochemical Corporation, known as Sinopec group, and Oil & Natural Gas Corporation’s (ONGC) overseas arm, ONGC Videsh Ltd (OVL), are close to signing a deal with Iran to develop the Yadavaran oil and gas field.
Sinopec may get a 51% stake in the field, along with operatorship rights, the Shanghai Securities News reported.
Another 29% may come to OVL with Iranian companies holding the remainder.
A senior OVL executive told DNA Money that the company was yet to hear from the Iranian government, but added India had an understanding with the Iranians that once the terms for acquisition with the Chinese company were finalised, a 29% stake would come to it on the same conditions. It appears that Iran and China have reached some settlement since the political situation in Iran was such that the deals with OVL and Sinopec could not be finalised earlier, said an official.
OVL and Sinopec last month teamed up to buy a 50% stake in Omimex de Colombia Ltd, a firm that controls oil and gas-producing assets in Columbia.
China and India are considered to be the most aggressive buyers of oil interests world over.
The coming together of India and China is seen as the best aspect of the hydrocarbon scene in South Asia.
“After it was clearly agreed by the two (India and China) governments to pursue relationship, our companies have been engaging with each other,” said Talmiz Ahmed, director-general, The Indian Council of World Affairs.
Ahmed headed a high-level delegation from India that spearheaded Sino-India cooperation in hydrocarbons last year.
India and China had been talking to Iran on Yadavaran, an oil field located in Khuzestan with 3 billion barrels recoverable oil reserves, since 2004.
Iran had agreed to grant Sinopec a 51% stake in the Yadavaran field’s development.
China was to get 10 million tonne of liquified natural gas (LNG) annually from Iran for 25 years.
Iran had earlier negotiated giving the Indian company a 20% stake in the field for buying 7.5 mt LNG from Iran.
Officials hoped that a settlement on Yadavaran may also pave the way for finalisation of LNG deal.
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