The Economic Times of India reported Friday the government was mulling a separate company for work in Iran. The company would be "fully owned by the government" and work under the direction of the Oil Ministry, sources close to the conversation told the newspaper.
The report said India's Oil and Natural Gas Corporation Ltd. would be kept away from any new company because of the attention it would likely receive from a U.S. government wary of India's relationship with Iran.
Indian imports of Iranian crude oil were limited by sanctions restricting payment and insurance options. New Delhi in June secured a waiver from U.S. sanctions for reducing the amount of Iranian crude oil it imports.
The report Friday said India can't afford to ignore key sources of energy so close to its shores because of rising energy needs. It said India was already in a "catch-22 situation" because it was eager to tap into Iranian natural gas sources while at the same time avoiding additional scrutiny from the United States.
India is the fourth largest energy consumer in the world.