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Heat the olive oil and butter in a medium pot over medium heat. Add the onion, and cook until soft and translucent.
Stir in the garlic and sauté for about 30 seconds, just until fragrant.
Add the rice and tomato paste (if using), stirring to coat the grains.
Pour in the chicken broth and add the saffron, bay leaf, salt, and pepper. Stir to combine.
Scatter the frozen peas and carrots over the top without stirring.
Cover the pot and simmer on low heat for 20-25 minutes, or until the liquid is absorbed and the rice is tender.
Remove from the heat and let the rice rest, covered, for 5 minutes.
Fluff gently with a fork, remove the bay leaf, and serve warm.