Iran has awarded the development of an offshore hydrocarbon block in the Persian Gulf to a domestic company after an Indian state-run consortium dragged its feet on operating the project.

National Iranian Oil Company (NIOC) signed a five-billion-dollar deal with an Indian consortium led by Oil and Natural Gas Corporation Limited (ONGC), in 2002 for the development of Farsi Block, which comprises Binaloud Oil Field and Farzad B Gas Field.

India’s ONGC has claimed that oil recovery from Binaloud would be uneconomical, but experts at Iranian Offshore Oil Company (IOOC) have found in their studies that production of heavy crude oil from the field would be possible in the near future.

Jalal Mousavi, R&D director of the IOOC, was quoted by Mehr News Agency as saying that a 6.8-million-euro agreement has been reached between the IOOC and Tehran University to conduct feasibility studies on the oil field.

He added that the project is currently in the stage of “seismic data processing.”

“Currently, reservoir rock and reservoir oil samples are being tested while seismic data are being processed so that we would reach our objectives in this field by benefitting from modern technologies,” Mousavi said.

The Farsi block sits atop 508 billion cubic meters (bcm) of natural gas, 3.5 billion barrels of heavy crude and 212 million barrels of gas condensate. In the first phase of its development, the block will produce 1.1 billion cubic feet (bcf) per day of natural gas after drilling seven offshore wells.