The $16bn deal involves $6bn of investment in developing offshore facilities and $10bn on onshore fields over the next 25 years.
Countering the US
It comes at a time when Tehran is striving to counter US efforts to curtail traditional western investment in the country's energy sector because of Iran's nuclear programme. China's major oil refiner Sinopec also recently agreed a $2bn investment to develop Iran's Yadavaran oil field.
However, Iran requires advanced technical help, as well as up to $160bn of investment in its oil and gas sector over the next seven years, to meet planned output growth. The target includes doubling gas production to one billion cubic metres a day.
The big incentive for investors is that Iran has an estimated 17 per cent of the world's gas reserves in addition to 11 per cent of global oil reserves. But the problem is not just about politics.
Apart from US pressure on international oil companies to suspend investment in Iran there are also corporate concerns about the growing financial risks associated with the huge investment commitments required in long-term energy projects.
Iranian officials have declared that earlier preliminary deals, for example, involving Royal Dutch Shell and Total will lapse if negotiations are not concluded by mid 2008.
Tehran is gambling that its bullish policy of seeking a more diversified investor profile for its oil and gas developments and new customers will balance a lack of commitment by western companies.
One of the largest projects in this strategy is a $7.4bn venture to supply gas to Pakistan that involves the construction of a 2,600 kilometre long pipeline. Broad agreement of the plan, including pricing, has been reached with Pakistan with only technical issues to be resolved, according to Iranian officials.
It is hoped that India will also be a customer for the Iranian gas but sticking points involve the security of supplies via Pakistan and the cost of gas transit fees to be paid to the latter.
In the Middle East, Iran is also courting Gulf based partners and it is planning to supply gas to the UAE's Crescent Petroleum and aiming to develop its offshore infrastructure in the Salman gas field to supply customers in the emirates.
A $2bn investment is being considered by Oman and Iran to develop the Kish gas field. This would see one billion cubic feet per day of gas supplied to the sultanate via a 500 kilometre long pipeline.
However, Iran's biggest problem in developing a gas export industry lies not just in securing investment but also in reforming the heavily subsidised domestic gas industry which gives no incentive to users to economise on consumption.
Until domestic demand is reined in, and more gas deposits are exploited, developing Iran as a major regional and global gas exporter will prove difficult.
See also: West's oil and gas investments in Iran falter Egypt's gas strategy faces dilemma