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Iran offers new terms to Indian companies.

Iran has offered new, more alluring terms to reluctant Indian companies to win the investment it craves for its decaying energy sector suffering from tight Western sanctions.

Iran started offering production sharing contracts (PSCs), long denied to investors, to a group of Indian oil executives visiting Tehran in January, an Indian industry source said.

Tehran's insistence, until now, on paying contractors back in oil made projects unattractive to foreign firms even before sanctions made it nearly impossible for most to work there.

Iranian Foreign Minister Ali Akbar Salehi repeated the production sharing offer during an India-Iran Joint Commission meeting with Indian external affairs minister Salman Khurshid in Tehran, Indian media reported.

Indian firms say the risks of investing large sums in Iran are still too great, even with a more attractive PSC regime.

"We expressed our reservations because of international sanctions and non-availability of services and material required for execution projects," said a source who was involved in talks with Iran on potential upstream activities in January.

Three Indian companies with stakes in a gas field in Iran -- Indian Oil Corp, ONGC Videsh and Oil India -- told a US government watchdog late last year that they had no plans to pursue further work on the project.

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Publication:Oil & Gas News
Geographic Code:7IRAN
Date:May 20, 2013
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