India's ONGC Videsh to spend over $3 billion on Iran gas block

MUMBAI (Bloomberg) -- The overseas arm of India’s biggest oil and gas explorer intends to spend more than $3 billion on Iran’s Farzad-B natural gas block.

ONGC Videsh last month submitted a revised plan to the Iranian government for the block, which the company will be able to develop within five years, Managing Director N.K. Verma told reporters in Mumbai on Tuesday. The Indian oil company is now waiting for feedback from Tehran, Verma said.

India has been weighing investments in Iran worth up to $20 billion. In addition to oil and gas exploration, the South Asian nation has considered petrochemical plants, gas-processing facilities and port expansions, including the industrial hub of Chabahar, Oil Minister Dharmendra Pradhan said last year during a visit to Tehran.

Iran is seeking foreign investment to revive its oil, gas and petrochemical industries since international sanctions on its economy were removed last year. Output from Farzad-B could range from 1 billion to 1.6 Bcfgd, Verma said.

Parent company Oil & Natural Gas Corp, which is up 34% in the past year, rose 0.4% to settle at 185.80 rupees Monday. India was closed Tuesday for a public holiday.