A rig will be built in three years

Oil Minister Bijan Namdar-Zanganeh told reporters that Iran was unwilling to wait for the dispute over the status of the Caspian to be resolved before beginning exploration work.

Four other littoral states - Russia, Kazakhstan, Azerbaijan, and Turkmenistan - are involved in the dispute.

A meeting of leaders from the five countries - originally scheduled for 8 March - has now been postponed until April.

Disputed sea

The dispute arose in 1991 following the break-up of the Soviet Union, which had an agreement with Iran over the Caspian.

Since then, the new post-Soviet states have signed bilateral agreements on how to divide the sea, but Iran has refused to recognise them.

Teheran insists that any deal must be based on the 1920 and 1940 agreement between Iran and the Soviet Union.

On Monday, foreign ministry spokesman Hamid Reza Asefi repeated Iran's view that it is entitled to an equal share of the sea - 20% - regardless of the length of its coastline.

The issue is likely to be discussed next week when Iranian President Mohammad Khatami visits Russia.