Iran Gives ONGC March Deadline To Sign Farzad B Gas Field Deal

Iran has given India's Oil & Natural Gas Corp. until early March to sign a deal to develop offshore gas resources in the Arabian Gulf, Dow Jones said Thursday.

The compnay is, however, likely to seek more time from Iran due to tighter sanctions imposed by the West on the Middle Eastern country over its alleged nuclear weapons program.

They said a team from ONGC Videsh Ltd., the overseas investment arm of ONGC, will likely visit Iran later this month to continue talks for signing a service contract to develop the Farzad-B gas field, which lies in the Farsi block to the north of Qatar.

"ONGC wants to keep Iran engaged. It plans to continue talks and seek more time for decision making," one of the people said. "Under the current political climate, there's no way ONGC can do anything more than that."

Iran's development of new oil and gas fields as well as maintenance of existing fields have been slowed or halted by a combination of sanctions or the threat of sanctions, difficulties in raising funds and due to Iran's tough demands.

ONGC Videsh owns 40% interest of the Farsi block and is its operator. State-run Indian Oil Corp. and Oil India Ltd. own the remaining shares in the consortium.

In 2002, they won National Iranian Oil Co.'s exploration service contract for the block and declared Farzad-B gas field commercial in 2008 after drilling several wells.

However, ONGC hasn't signed the development service contract or committed any investment for the gas field so far.