Located at water depths ranging from 20m to 90m within the 3,500km² Farsi offshore block, the Farzad gas and condensate field straddles the Iran-Saudi Arabia maritime border.
According to the estimates, the field holds approximately 23 trillion cubic feet of natural gas reserves and gas condensates of 5,000 barrels per billion cubic feet.
In 2002, the Indian consortium comprising OVL, the overseas investment arm of India’s state-owned Oil and Natural Gas Corp (ONGC), the Indian Oil Corporation, and Oil India secured an exploration service contract for the Farsi block.
Later in 2008, the consortium discovered the gas field in the Farsi offshore block.
In 2009, a consortium announced an approximately $3bn investment plan to develop Farzad-B.
Following the submission of a master development plan (MDP) to bring the discovery into production in April 2011, negotiations were stalled as a result of international sanctions imposed on Iran over its nuclear plans.
Although negotiations restarted in 2015, technical studies could not be concluded due to sanctions on Iran in November 2018, ending deliberations between the Indian consortium and Iran.
In 2020, the National Iranian Oil Company (NIOC) decided to award the contract to a local firm to develop the field. A development contract was subsequently signed with Iranian company Petropars.
Through the contract, Petropars will produce 28 million cubic metres of sour gas per day over five years.
Officials were cited by the PTI as saying that the exploration contract allowed OVL and its partners to participate in the offshore field development project.
Citing the exploration service contract, the Indian consortium has been asked by Iran to exercise its rights to participate in the field development contract with a minimum stake of 30%. This option period is valid for 90 days
OVL currently owns a 40% stake in the Farsi offshore exploration block while the Indian Oil Corporation owns a 40% stake. The remaining 20% is held by Oil India.