Iran issues ultimatum to India over gas field

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Iran has given a one-month ultimatum to an Indian consortium over the development of a gas field whose delay by India has been attributed to western pressure, the semi-official Fars news agency reported on Sunday.

Tension between Iran and the West rose last month when Washington and the European Union imposed the toughest sanctions yet on Iran in a bid to curb its nuclear programme.

"Iran has given a one-month ultimatum to India over its decision on participating in the development of Farzad-B gas field," Fars quoted an unnamed oil official as saying.

"Possibly foreign pressures played a role in influencing Indian's delays to develop the field," he said.

Iran said the field's in-place gas reserves have been estimated at 21.7 trillion cubic feet (tcf), of which 12.5 tcf are recoverable.

The report said Iran was in talks with state-run Oil and Natural Gas Corporation Limited for about three years.

In October 2010, Iran said it would soon sign a $5 billion contract with a foreign company to develop its offshore Farzad-B gas field, without naming the company.

ONGC has exclusive exploration rights for the offshore Farsi block, of which the Farzad-B gas field is a part.

The EU's ban on Iranian oil came after U.S. President Barack Obama signed new sanctions into law on New Year's Eve that would block any institution dealing with Iran's central bank from the U.S. financial system.

The measures are aimed at shutting off the second-biggest OPEC oil exporters' sales of crude.

However, India which relies on Iran for about 12 percent of its oil needs or around 350,000-400,000 barrels per day (bpd), said it would not cut its oil imports from Iran.

If fully implemented, the measures will make it impossible for countries to buy Iranian oil.

Iran sits on the world's second-largest natural gas reserves, but the development of its energy sector has been slowed by the international sanctions.

Many foreign companies have been forced to pull out of the Islamic state's energy sector due to the fear of sanctions.

Iran has previously excluded some foreign oil and gas companies, accusing them of dragging their feet over its projects.