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India to increase oil imports from Iran

India to increase oil imports from Iran

MUMBAI: In April through January, the first 10 months of this fiscal year, India imported about 17% less Iranian oil at about 442,800 bpd.

Supplies from Iran were down as state refiners, which account for about two-third of India’s nearly 5 million barrels per day demand, curbed imports in protest at Tehran’s move to grant development rights for the giant Farzad B Gas Field to others, Reuters reported.

“We have got good incentives compared to other major producers. We will get benefit if we buy from Iran … We will boost oil imports from Iran compared to this fiscal year,” Indian Oil Minister Dharmendra Pradhan told reporters, without elaborating.

Iran, which used to be the second-biggest oil supplier to India before sanctions, is gradually raising its market share in the world’s third-biggest oil consuming nation.

In 2017, Iraq for the first time emerged as the top supplier to India on an annual basis, while Saudi Arabia slipped to second position.

Pradhan said India had also sought a stake in Iran’s South Azadegan Oilfield. He said Tehran had not made any commitment on India’s request, but was willing to show data on some fields to an Indian delegation next week in Tehran.

India recently offered a development plan worth about $6 billion for Farzad B and sought gas pricing of about $4 per million British thermal units to earn double-digit returns.

Since local gas prices in Iran are about $2.1 per mmBtu, India has asked for a stake in a producing oilfield in Iran in addition to Farzad B to improve its average return on investment.

“I am very optimistic about the future of the relationship between the two countries and our companies, especially for developing oil and gas fields,” Iran’s Oil Minister Bijan Namdar Zanganeh said. Iran said it expected Indian orders to grow.