A drilling rig in the Arabian Gulf. Iran says the newly discovered field, 30km south-east of the island of Kish, is capable of producing 70 million cubic metres of gas per day. Image Credit: Bloomberg News

Tehran: Iran has discovered a natural gas field in the Gulf with reserves of more than 700 billion cubic metres, Oil Minister Masoud Mirkazemi said yesterday.

The Forouz field was discovered about 30km southeast of the island of Kish and had the capacity to produce 70 million cubic metres of gas per day, he said.

Iran, a major crude exporter, has the world's second-largest natural gas reserves after Russia. Iran says it needs around $25 billion a year (Dh91.7 billion) in oil and gas industry investment.

But sanctions over Iran's nuclear programme have deterred international energy companies from investing in the Islamic republic, slowing Iran's development as a major exporter.

Iranian authorities have played down the impact of international sanctions, saying they have helped Iran to become self-sufficient. Mirkazemi said sanctions on an "energy-rich" country such as Iran would be useless. "I am firmly announcing that Iran's energy sector will face no problems because of the sanctions," Mirkazemi said.

The United States and its European allies have said they fear that Iran's nuclear programme could be a cover to build weapons.

However Tehran has insisted its nuclear work is for the generation of electricity to meet booming domestic demand.

In a move to pressure Iran into curbing its nuclear activities, the UN Security Council has imposed sanctions on the Islamic state since 2006.

US President Barack Obama signed into law on Thursday far-reaching new sanctions on Iran that were designed to squeeze the Islamic Republic's fuel imports and deepen its international isolation.

The European Union has also decided it will implement additional measures.

The world's fifth-largest oil producer, Iran lacks sufficient refining capacity and imports up to 40 per cent of its petrol.