Iranian oil officials recently visited a 5,000-acre site for in Brazil for the proposed construction of an oil refinery and petrochemical plant, a report said.

Mohammad Ali Qane'zadeh, Iran's ambassador to Brazil, said in an interview that his government is "very much interested" and "ready to put money and energy" into the project, Iran Daily reported, citing Bloomberg.

The area already has a deep water port for tankers and its location would provide relatively easy access to the Pacific and Asia via the Panama Canal.

The project would help Brazil address its dependence on refined fuel imports and could provide a boost to the local economy, Jose Reinaldo Tavares, a federal lawmaker, said in an interview.

The project would require investment of at least $2.5 billion, according to the legislator, who recently travelled to Tehran and New Delhi as part of an official delegation from the Brazilian state of Maranhao.

He added that the main obstacle to the deal is US banking sanctions.

Engineers India, a top engineering company, is participating in the discussions but its involvement will depend on financing conditions, the report said, citing people in India and Brazil familiar with the talks.