Dharmendra Pradhan 1
Dharmendra Pradhan 1REUTERS

In one of the most awaited diplomatic exchange since western sanctions were lifted on Iran, India's Minister of Petroleum and Natural Gas Dharmendra Pradhan met his Iranian counterpart Bijan Zanganeh in Tehran Saturday, reported Shana news agency.

The two ministers expressed hope to increase India's import of Iranian oil from its current 350,000 barrels a day. "We hope this number will increase now that sanctions have been lifted," Zanganeh told Shana the state agency linked to Iran's oil ministry.

A delegation of heads of India's major oil and energy firms accompanied the minister, who has consistently evinced interest in Iran's oil, gas and petrochemical projects.

Reuters reported that the two ministers signed a cooperation agreement encompassing oil exports, petrochemical operations and gas-field development.

Pradhan addressing a joint press conference said, "Iran and India's energy ties are no longer limited to crude oil imports," and that India was ready to invest $20 billion in the port of Chabahar in Southeastern Iran. He added that "energy sector can be determining in development of Tehran-New Delhi relations."

However, despite high speculations on "definitive agreements" on Farzad-B gas field, the report added that the first day of the Indian minister's visit did not see any final deals being signed.

Zanganeh reportedly confirmed that the most important item on his talk with Pradhan was the investment to develop Farzad-B offshore gas field. He added, "It was decided that Iranian and Indian sides agree on the schedule of implementing the project which is a demanding job and take time".

Sarosh Zaiwalla, senior partner at Zaiwalla & Co Solicitors, whose company advices Iranian state-owned explorer Petropars (National Iranian Oil Company), told International Business Times India that post-sanction Iran wants to cultivate closer ties with countries in the East. And India's close relationship with Iran is an added advantage. 

However, he noted that Iran wants all its future agreements with all countries to  be carried out in a fair manner, given its feeling of being exploited by earlier contract with western companies. "The existing contract too will see new modalities that in all likelihood be based on profit sharing or on the market prices," Zaiwalla added.

The Gulf country's new Iranian Petroleum Contract (IPC) once passed by the Parliament is expected to provide clarity on many of India's concern.

Dr Ebrahimi, former chief negotiator for NIOC/Petropars Iran, said in a note to IBT India that there were a "lot of terms and condition issues that both parties (India's explorers and NIOC) should negotiate and discuss to come to mutually acceptable and agreed provisions in the IPC contract" for the Farzad-B gas field.

In a related development on the previously vexed issue of held-up payments and type of currencies during Iran's western sanctions, Zanganeh announced that Indian minister met with the Governor of Central Bank of Iran, and both sides agreed to continue with the previous methods of payment between Iran and India.