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EghtesadOnline: Oil Minister Bijan Namdar Zanganeh on Wednesday dismissed India's decision to cut oil imports from Tehran in 2017-18 by a fifth as a threat, in an escalation of a dispute over a giant gas field contract.

Sources familiar with the matter told Reuters last week that Indian state refiners were going to cut oil imports from Iran, as New Delhi seeks to put pressure on Tehran to award the Farzad B gas field to an Indian consortium.

"India is one of our good costumers, but we cannot sign a contract under threat," Zanganeh was quoted as saying by state news agency IRNA, Reuters reported.

"India's cut of oil imports from Iran will not cause any trouble to us as we have other buyers," Financial Tribune quoted him as saying.

Zanganeh said despite an extension of deadlines, India has not offered an acceptable proposal for the development of the gas field.

"Their proposal was not profitable to Iran ... We sent the Indians a letter and told them we are keen to continue negotiations, but under sensible conditions, not under threats."

India, Iran's biggest oil buyer after China, was among a handful of countries that continued to deal with the Tehran despite western sanctions over its nuclear program.

A consortium headed by ONGC Videsh Ltd, the overseas investment arm of Indian explorer Oil and Natural Gas Corp, discovered Farzad B in the Farsi offshore block in 2008.

The consortium, which also includes Oil India and Indian Oil Corp, could not obtain permission to develop the field due to sanctions, but those sanctions were removed last year.

India and Iran had both been hopeful of wrapping up the Farzad B deal by March, although Zanganeh said Iran has asked other countries to submit their proposals for its development.

A senior executive at ONGC Videsh said on Tuesday the Indian company has submitted a revised plan to develop the Farzad B project, including a commitment to spend more than $3 billion.

ONGC Videsh expects to produce between 1 billion and 1.6 billion cubic feet per day (28 million and 45 million cubic meters a day) of gas in five years from the start of development of the block, according to N. K. Verma, the company's managing director.

Bijan Namdar Zanganeh Iran-India trade Iran oil Iran gasfield