Foreign companies are rushing to win bids for development of a new oil field discovered in the southwestern province of Khuzestan with recoverable reserves of around three billion barrels.

The English-language daily 'Tehran Times` quoted a senior official in the Oil Engineering and Development Company, Ali Akbar Al-e Aqa, here Sunday as saying that foreign companies should submit their sealed bids by September 22, 2004.

According to the official, three companies had initially expressed their keen interest in winning the bids but that now European and Asian firms have joined the fray.

The Yadavaran oil field, with an in-place reserve of some 17 billion barrels of proven reserves, comprises the Koushk and Hosseinieh oil fields which were discovered in 2000 and 2002, respectively, in the oil-rich Khuzestan province near the Iraqi border.

The oil field in Koushk is estimated to contain nine billion barrels while that in Hosseinieh 1.5 billion barrels.

Al-e Aqa explained that recent exploration findings have divulged that the two oil fields are connected at various layers and form an oil field with a cumulative reserve of 17 billion barrels.

He said that the past five years have been unprecedented in the history of the Iranian oil industry in terms of the discovery of new oil reserves, adding that the total in-place discoveries during the period have been well in excess of 100 billion barrels.

Development of the Yadavaran oil field, which is expected to yield 300,000 to 400,000 barrels a day, is one of the priorities of his ministry, the official added.

Iran is currently negotiating with the Indian oil and gas company Videsh Ltd for development of 20 percent of the Yadavaran oil field in exchange for New Delhi's purchase of five million tons of liquefied natural gas.

Besides India, companies from China and Russia as well as the French giant TotalFinaElf, the British Shell and Russian Statoil have purchased documents to enable them to bid for the development of the oil field.

Yadavaran is located southeast of the giant Azadegan oil field currently being developed by a Japanese consortium.