French energy group Elf Aquitaine and Canada's Bow Valley Energy signed a contract in April with the National Iranian Oil Co (NIOC) to develop the field at an estimated cost of $300 million.

The India Oil official said the Indian state oil company would take up 35 percent of the development costs of the field and in return would receive 1.15 million tonnes of crude annually (23,630 barrels per day) over the next five years.

The official, who declined to be identified, was responding to questions from Reuters to clarify IOC's status in the project after he referred to IOC taking up "equity share" in comments he made on Friday.

When Elf signed the original contract in April, it said the contract was on a buy-back basis, which provides for the consortium to be reimbursed and paid in the form of crudefrom the field.

Iranian laws do not allow direct equity investment in its crude and gas fields.

The Balal field in Iran is forecast to annually produce 11 million tonnes of crude for up to 15 years. Indian Oil Corporation's involvement after five years would be decided once crude began to flow from the field, the company official said. Initial crude production should start in the next three to six months, he said.