KOLKATA (miningweekly.com) – India has launched a fresh diplomatic push to salvage a deal for Iran’s Farzad B oil and gas fields.

At a weekend meeting between the Petroleum Ministers of the two countries, India leveraged its past relations with Iran to bargain for a new deadline to secure the award of the offshore Farzad B oil and gas assets in the Persian Gulf.

With the October 31 deadline missed, India’s Petroleum Ministry has pressed its counterparts to complete a deal for the assets by January or February, pointing out that the overseas arm of national exploration and production major, ONGC Limited, had made the discovery in 2008, at the height of western sanctions against Iran.

Officials familiar with weekend talks between India and Iran said on Monday that while both countries acknowledged past relations and the importance of India securing the oil and gas field to the future of that relationship, no common ground could be reached.

The Indian consortium, led by ONGC Videsh, has committed an investment of $10-billion, of which $5-billion is hinging exclusively on the development of the oil and gas reserves. However, the Indian government has reportedly conveyed that the developmental investments are “too high”, considering that Iran is assured a fixed rate of returns on such investments.

The Indian officials also said that they have unofficially learnt that Iran had decided to give bilateral talks between India and Iran two months before they would decide on putting Faizad B up for fresh international bidding.

India was first awarded the Farzad-B field for development in 2010, but Iran subsequently pulled the plug and took back the asset, with the aim of putting it up for fresh bidding.

It was also learnt that the Indian consortium appointed a new consultant to advise and rework the financial aspects of the proposed investments factoring in the stand taken by the Iranian government, although this could not be independently confirmed from either the Petroleum Ministry, or ONGC Videsh.

One of the officials familiar with the talks said that negotiations on Farzad B should be seen against the backdrop that Iran had emerged as the largest supplier of crude oil to India over the past few months, overtaking from Saudi Arabia, which has changed the importance of Farzad B to bilateral relations.