Nicosia, Nov 18 - The National Iranian Oil Company (NIOC) has formally approved the feasibility report submitted by ONGC Videsh Ltd (OVL) and its consortium partners on the discovery made in Iran''s Farsi offshore block, which covers an area of 3,5000 sq km.

The feasibility report was submitted by OVL and its partners - the Indian Oil Corporation (IOC) and Oil India Ltd last December.

Following this development, the consortium of Indian companies led by OVL, can now work towards the development of the gas field. Iran follows a bidding mechanism for giving development rights.

According to estimates, the block holds recoverable gas reserves of about 12.5 trillion cubic feet of gas and 1 billion barrels of oil in place.

The Indian companies plan to invest close to three billion dollars to develop the gas field. They have already invested 90 million dollars so far in the field. This was the first block where OVL, as an operator, had struck oil and gas.

OVL had won the bid for the 3,500-sq-km Farsi offshore block in early 2002 and signed the exploration service contract with NIOC on December 25, 2002.

OVL is the operator of the block with a 40 per cent participating interest, while IOC holds another 40 per cent and the remaining 20 per cent stake is held by Oil India.(ANI)