Indian firms line up $3b to develop fields in Iran

New Delhi: Indian oil companies plan to invest $3 billion to develop gas fields in Iran's Farsi block if Tehran gives the go-ahead, a source said, adding the block holds estimated recoverable gas reserves of 12.8 trillion cubic feet.

The Gulf block is the first overseas asset for which Indian firms have been given exclusive exploration rights, with a service contract awarded to them in 2002, but permission to develop the asset has yet to be given.

Iran is drawing interest from Indian and Chinese firms that are keen to tap the world's second-largest reserves of oil and gas and are less susceptible than many other companies to Western pressure over Tehran's nuclear programme.

The state-run Oil and Natural Gas Corp and Indian Oil Corp (IOC) each hold a 40 per cent participating interest in the Farsi block, while smaller outfit Oil India has the rest. It is operated by ONGC's overseas investment arm ONGC Videsh.

"So far we [the consortium] have invested $90 million and if we are allowed to develop the [gas] field, we would be investing around $3 billion," said a senior IOC official.