ONGC [Get Quote] Videsh Ltd and its partners Indian Oil [Get Quote] Corp and Oil India Ltd have proposed to invest about $3 billion in bringing to production 12.8 trillion cubic feet (Tcf) of gas reserves they have found in Farsi gas block in Iran in the next 3-4 years.

The consortium had submitted a commerciality report of the gas find, with in-place reserves reported at up to 21.68 Tcf, in December and is awaiting a decision from the Iranian authorities to go ahead with the development, a senior IOC official said.

"We see recoverable reserves at 12.8 Tcf," he said. "Typically, Iran may take 1-2 years to decide on awarding the development but we are hopeful it may be done soon in case of Farsi."

OVL, the overseas arm of state-run ONGC, IOC and OIL have a service contract for the Farsi block where they will be reimbursed 35 per cent plus $90-million  investment they made during the exploration phase.

The service contract for exploration expires this month. If the consortium gets the developmental rights, they will be paid a 15 per cent rate of return over and above the investments they make.

"The oil and gas will belong to National Iranian Oil Co (NIOC) and it is they that will do the marketing of it. We have no say in that," the official said.

In the commercial viability report to NIOC, OVL - the operator of the field - has said the least gas volume was 9.48 Tcf and the high-case estimate was 21.68 Tcf after independent studies by Fugro Robertson Ltd of the UK and ONGC's Institute of Reservoir Studies.

The official said the block also has oil reserves that may be around 1 billion barrels in size. "We will submit commerciality report of the oil find in a month's time."