Farzad B gas field ( Credit: National Iranian Oil Company (NIOC) Photograph:( AFP )
The overseas investment arm of the ONGC called OVL has a 40 per cent stake in the 3,500 square kilometre field
A gas dispute has flared up between India and Iran regarding the profit-sharing of a field.
The gas field, called Farzad B, is located on the a Farsi island in the Persian Gulf.
India's state oil company Oil and Natural Gas Corporation Limited had invested $85 million in the gas field.
Under an agreement between the two countries, it was decided that India will receive a profit of 30 per cent reaped from the field.
The overseas investment arm of the ONGC called OVL has a 40 per cent stake in the 3500 square kilometre field.
However, after the imposition of international sanctions, Iran gave up the Farzad B gas field to a domestic gas producer called Petropas.
It is a conglomerate under the control of the man with ultimate authority in Iran, Supreme Leader Ayatollah Ali Khamenei.
This was a major setback between to India's ties with Iran.
Both New Delhi and Tehran failed to reach an agreement under the Joint Comprehensive Plan of Action or the Iran nuclear deal when the sanctions were temporarily lifted.
The field is significant because it holds 23 trillion cubic feet of gas reserves in place. 60 per cent of this reserve is recoverable.
Iran's Minister of Petroleum at the time, Bijan Zanganeh had said ''The offer made by the Indians will not bring any benefit for Iran in 30 years.''
''Whatever is produced, the Indians will take for wages and the cost of their operations. Our goal in developing the fields is to make money," he added.
Setad will face difficulties such high temperature and pressure along with environmental complexities and high level of impurities on the Farzad B field.