Oil and Natural Gas Corporation and an unnamed European firm are expected to conclude energy contracts totalling $7 billion with Iran, state-run broadcaster IRIB said today.

The two contracts are likely to be signed in the near future, IRIB said, citing Mahmoud Zirakchian-zadeh, managing director of Iran's Offshore Oil Company (IOOC).

ONGC, which had completed a development plan for the Farzad gas field, is expected to make investments of about $3 billion for which "contractual and financial negotiations" are under way, he said.

The gas field forms part of the Farsi block in the Gulf.

ONGC had also discovered an offshore oilfield, Binaloud, in the Farsi block with one billion barrels of in-place reserves of heavy crude, state television quoted him as saying earlier.

In November in New Delhi, a senior source at a company holding a stake in the block said

Iran had as far back as in November 2008 approved the commercial viability of natural gas production at the Farsi block operated by ONGC and others and the firms were to submit a $3 billion development plan to Tehran.

ONGC and Indian Oil Corp each hold a 40 per cent interest in the block, while smaller outfit Oil India Ltd has the rest. It is operated by ONGC's overseas arm ONGC Videsh Ltd.

The block is estimated to hold recoverable gas reserves of 12.8 trillion cubic feet.

The European firm, which is to sign a contract with Iran, had completed a development plan for the offshore Lavan natural gas field in the Gulf, according to  Zirakchian-zadeh.

"We are now involved in serious negotiation on the contract's financial aspects," he told IRIB, estimating the investment at $4 billion.

Iran's coming under UN and US sanctions over its disputed nuclear work had forced France's Total and Royal Dutch Shell to delay or abandon plans for major natural gas export projects in the country.

The Lavan field, which was discovered in 2003, has in place reserves of around 10 trillion cubic feet of natural gas.

"Based on this project there will be four million tonnes of liquefied natural gas produced annually," Zirakchian-zadeh said.

Iran, the world's fourth-largest producer of crude oil, also has the world's second-largest gas reserves after Russia. Iran has not yet exported any LNG but says it will be able to produce 77 million tonnes a year by 2014.