India is planning to offer a $3-4bn development plan for the Farzad B gas field to Iran, after Tehran reduced the scope of project.
The new terms confine Indian companies to just production of gas and development of the field, according to a Reuters report.
Although a formal offer is yet to be made from the Indian side the new bid would be between $3bn to $4bn and would not include gas processing and development of downstream facilities.
Relations between the two countries, which have long held deep trade ties, were strained last year after Iran sought other investors for the field and media reports suggested Tehran would award it to Russia's state-owned gas firm Gazprom.
In a reactionary measure, India directed its state refiners to slash oil imports from Iran.
New Delhi and Tehran have been trying to eliminate differences over the development of the Farzad B gas field, since its discovery in 2008 by Indian firms led by ONGC Videsh, the foreign arm of the Oil and Natural Gas Corporation (ONGC).
Indian companies were hoping to get rights to develop the giant reserve, as the nation was one of the handful of countries that continued to deal with Iran during years of crippling sanctions against the Islamic Republic over its nuclear programme.
At the request of Iran, Indian companies last year submitted a $11bn development proposal that covered the development of upstream activities and downstream infrastructure.
At a meeting in New Delhi in February, Iran reduced the scope of the development plan for the Farzad B field and asked India’s state-owned oil firms to submit a revised proposal, according to a Reuters report.
The field is estimated to hold 22 trillion cubic feet (tcf) of reserves, of which 16 tcf are deemed recoverable.
India and Iran will discuss the revised development plan for the field during the coming days, during Iranian Oil Minister Bijan Zanganeh's visit to Delhi.
To strengthen its ties with India, Iran has reportedly offered a higher freight discount on crude sales, besides agreeing to consider India's demand for a stake in a producing field.
In return, India has agreed to boost oil imports from Iran, India's oil minister Dharmendra Pradhan said last month after a meeting with Zanganeh in Delhi.
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