Indian Oil minister Dharmendra Pradhan is expected to lead a delegation to Iran in the coming weeks to scout for opportunities in oil and gas, following the end of sanctions on Tehran by the West.
The talks will cover the development of the Farzad-B field, revival of the Iran-Pakistan-India gas pipeline and the modernisation of the oil and gas infrastructure in the Islamic nation.
"India is keen on strengthening ties with Iran, as we stood by them when sanctions were imposed by the US and the EU. The petroleum minister will soon be leading an Indian delegation to Tehran in the coming weeks to discuss energy co-operation between the two nations," a senior oil ministry official told the Telegraph India Aug.2.
An Indian delegation led by finance secretary Rajiv Mehrishi has just returned from Tehran. This delegation comprised officials from the finance, petroleum and natural gas ministries and the RBI.
Officials said they discussed the payment of $6 billion owed by PSU refiners for the purchase of crude oil. The payment could not be made because the international settlement channels were blocked by the West.
India is keen to increase crude imports from Iran after settling the dues. Iran supplied around 11 million tonnes (mt) of crude of the total imports of 190mt in the last fiscal, a share of 5 per cent. Prior to the sanctions, imports were much higher at 18mt.
State-owned refiner IOC is planning to buy crude to operationalise its refinery at Paradip in Odisha.
The oil ministry hopes to convince Iran to honour its commitment to let ONGC develop the Farzad-B gas field in the Persian Gulf. It is one of the biggest gas field discoveries by an Indian company abroad. However, ONGC Videsh Ltd has shied away from investing nearly $7 billion because of the sanctions. The field has reserves of 12.8 trillion cubic feet of gas.
The country is also keen on reviving the Iran-Pakistan-India gas pipeline, which had been put on the backburner.
The development of the Chabahar port in Iran is also expected to pick up speed with the lifting of sanctions.
In 2003, India and Iran had agreed to develop Chabahar on the Gulf of Oman, near Iran's border with Pakistan, but the venture has moved slowly.
"With Pakistan not a feasible transit option, the Indian government sees the potential for Iran to serve as a crucial transit route to Afghanistan and Central Asia, a region with which Prime Minister Narendra Modi advocated greater linkages during a recent visit," Tanvi Madan, an analyst at Brookings Institution, said.