KOLKATA (miningweekly.com) – Following the signing of a landmark deal between the US, the UK, France, China, Russia, Germany and Iran, earlier this month, that prevents Iran from acquiring a nuclear weapon, India has moved swiftly to send a high-level Indian delegation to the West Asian country in the hopes of securing back the rights to develop the Faizad-B oil and gas block.

According to a senior government official, although securing rights to develop the oil and gas block was not on the official agenda, the delegation would definitely raise the issue of India being given the development rights of the block.

The delegation, comprising representatives from the Oil and Gas and Finance ministries, as well as the Reserve Bank of India (RBI), was rushing to Tehran to resolve the issue of India’s $7-billion debt to Iran for crude oil purchases when the country was under sanctions and official international banking channels were closed down.

While the delegation would seek a payment modality spread out over a specific period of time, the clearance of the outstanding debt would be used to press Iran to offer Faizad-B to an Indian consortium of oil exploration and production (E&P) majors.

Mining Weekly Online reported earlier this month that the Indian government was readying for some “smart diplomacy” to regain a foothold in the Iranian oil sector, with officials saying that, with a nuclear deal sealed and sanctions against Iran slated to be lifted over the next six to seven weeks, the Indian government considered it opportune to step up diplomatic engagements and enable Indian E&P majors to gain a first-mover advantage over the latter’s Western counterparts in post-sanction Iran.

Though government officials did not spell it out, the fate of Faizad-B would largely determine the success of India’s continued diplomatic engagements with Iran even at the height of sanctions against the country.

Faizad-B, with estimated oil and gas reserves of 12.8-trillion cubic feet of oil and gas reserves, in the Persian Gulf, had been a prized catch for a consortium of Oil and Natural Gas Corporation and Indian Oil Corporation in 2010. The block was taken back by the Iranian government and put up for fresh bidding.

The Indian delegation was also expected to be amenable to changes in contract terms to secure back the rights wherein overseas E&P companies would not have ownership rights over the block but have revenue sharing arrangements once production commenced from the oil and gas reserves.