New Delhi: The proposed development plan for the Farzad B gas field in Iran will be given USD 3-4 billion from India after there were some reports about Tehran reducing the scope of the project, according to two sources familiar with the project said.

Bilateral relations between the two countries were very deep along with trade ties but were strained last year after Iran sought other investors for the field and some media reports gave the idea that Tehran may award it to Russia’s Gazprom.

In retaliation to the action, India asked its state refiners to cut oil imports from Iran.

In a recently held meeting in New Delhi in February, Iran reduced the scope of the planned development for the Farzad B field and asked India to submit a revised proposal, according to the two sources who did not want to get identified due to the sensitivity of the matter.

There were several attempts by New Delhi and Tehran over the issue to narrow down differences over the Farzad B development rights as the discovery was made by Indian firms led by ONGC Videsh, which is the foreign investment arm of Oil and Natural Gas Corp, in 2008.

Indian companies were in the hope to get rights to develop the asset as India is considered to be among the handful nations that continued to deal with Iran during years of sanctions against the Country due to its nuclear programme.

The new terms introduced to the Indian Companies, confine them to production of gas and development, said the two sources.

Despite the fact that a formal offer is to be made, sources said, the new bid can be valued at USD 3 billion and USD 4 billion and would not include gas processing and development of downstream projects.

“As the negotiations are still ongoing, we would not like to comment at this stage,” ONGC Videsh said in a response to a Reuters’ email seeking comments.

Indian companies had last year submitted a $11-billion development proposal after the Iranian request, that covered the development of upstream activities and downstream infrastructure.

The field is estimated to contain about 22 trillion cubic feet (tcf) of reserves, of which 16 tcf are deemed to be easily recoverable.

India and Iran will discuss the revised development plan for the field in the coming next week, during Iranian oil minister Bijan Zanganeh’s visit to New Delhi.

To further strengthen its ties with India, Iran has now offered a higher freight discount on oil sales, besides agreeing to consider India’s demand for a stake in a producing field, sources told News Agencies last month.

In return for the offer, India has agreed on the point to boost oil imports from Iran, oil minister Dharmendra Pradhan said last month after a meeting with Zanganeh in Delhi.

You May Also Read: China Slams New US Tariffs List, Calls It A No-Benefit Deal For One And All