ONGC Videsh Ltd and its partners Indian Oil Corporation and Oil India Ltd have dropped plans to develop an oil field in Iran after the discovery was found to be commercially unviable.
The joint venture of OVL, Indian Oil Corp and Oil India (OIL) had in 2006 made an oil discovery in the Farsi offshore block which was, in the initial estimates, thought to contain one billion barrels of reserves.
"The oil discovery has been found to be commercially unviable primarily due to high sulphur content in the oil," an official in the consortium said.
The joint venture has informed the same to National Iranian Oil Company and have decided to abandon the project.
"The oil discovery has been held to be non commercial and we are not pursuing development of the discovery," he said.
The three have, however, submitted a master development plan envisaging an investment of $5 billion over 7-8 years in developing a massive gas field they discovered in Farsi.
The discovery, which was subsequently named Farzad-B gas field, has inplace reserves of up to 21.68 trillion cubic feet (Tcf), of which recoverable reserves may be 12.8 Tcf.
OVL holds 40 per cent interest in the Farsi offshore block located in the eastern part of the Persian Gulf off the coast of Iran near the Saudi Arabian border and covers an area of 3,500 square kilometres.
