"Separate contracts for developing the north and south Azadegan oil fields have been inked with the Chinese," said deputy Oil Minister Ahmad Qalebani.

He also said the contractor for the two oil fields is the same company, which he declined to name, adding that the amount of investment for the development of the two fields would exceed $6 billion, which is too much for Iranian contractors.

"Thorough development of these two giant oil fields requires more than $6 billion and the possibility of procuring such an amount by a domestic contractor does not exist."

Iran, the world's fourth-largest oil exporter, faces tight foreign sanctions due to its disputed nuclear programme. The West fears it may be planning to make atomic bombs. Tehran denies this and says it needs peaceful nuclear technology to boost its oil and gas exports.

Western firms have been wary of investing in the oil and gas sectors of the Islamic state which need both capital and modern technology to be developed, on concern about the sanctions.

Iran has increasingly shifted to Asian countries to develop its oil and gas fields. State-owned Asian firms are less susceptible to Western pressure to stay away from the Iranian market and are eager for energy supplies to feed their future growth.

In 2009, China National Petroleum Corp (CNPC) signed a memorandum of understanding with National Iranian Oil Co, promising to pay 90 percent of development costs for the South Azadegan oil field while taking ownership of a 70 percent stake. An Iranian official said the project needed investment of up to $2.5 billion.

Earlier that year, CNPC also won a deal to develop the North Azadegan oilfield. That deal was worth $2 billion in its first phase.