Iran, Russia Boost Oil and Gas Cooperation Ahead of Putin’s Tehran Visit

Moscow and Tehran are eyeing cooperation in over 10 oil and gas fields in Iran, a top official from the National Iranian Oil Company just days ahead of Russian President Vladimir Putin’s forthcoming visit to the Islamic republic on Wednesday, the China Global Television Network reports.

The head of NIOC’s exploration directorate Seyyed Saleh Hendi said that Russian companies with stakes in the Iranian oil and gas markets would be able to allocate more shares to establishing strategic alliances with European, Chinese and Southeast Asian companies.

“NIOC has already signed enough MoUs [memoranda of understanding] with Russian companies and now we are waiting for signing contracts and starting the execution of projects. According to the report I have received, NIOC has signed MOUs with Lukoil, Rosneft, Zarubezhneft, Tatneft, Gazprom and Gazpromneft and we are negotiating for more than 10 oil and gas fields development contracts,” Hendi said.

The NIOC earlier this month signed two co-operation agreements with Russian oil giant Lukoil for conducting geological surveys in Iranian waters of the Caspian Sea, Abadan plateau, and the northwest Persian Gulf area.

“Since Iran has decided to use Russian companies’ capabilities, NIOC is… negotiating with other companies, and in the event [these foreign companies and Iran] win the contract they will create a partnership with Lukoil,” Hendi said, commenting on the cooperation with Lukoil.

The technical negotiations with Lukoil on the Mansouri and Ab-Teymour oil fields had already been finalized. In the meantime, the banking problems to open a letter of credit to export Iranian oil to Russia have been resolved and the two states will embark on crude trade in the near future, the deputy oil minister for international affairs said.

“As per the terms of the contract, the National Iranian Oil Company will begin selling 100,000 barrels per day of oil to Russia within weeks and be repaid equally in cash and kind,” Amirhossein Zamaninia was also quoted as saying by Shana on Saturday.

According to Zamaninia, Moscow has been in talks over purchasing oil from Iran and preparations have been made to clinch a final deal as soon as legal details of the contract are finalized.

“In addition to strengthening ties with Russia in the oil industry, the deal will help build closer bilateral relations in other sectors,” Zamaninia said without elaboration.

The official believes that the deal can be seen as a move to further bolster Tehran-Moscow’s economic ties, as the two countries continue to expand their strategic partnership in the region.

Iran re-entered the global oil market following the landmark nuclear deal it struck in January 2016 with major global powers including Russia, China, the U.S., the UK, France and Germany which led to the lifting of international sanctions against the Islamic republic.

However, Iran is also a member of the Organization of the Petroleum Exporting Countries (OPEC) and is a signatory to the producers’ oil output cut deal reached in 2016, which is tightening the growth of Iranian oil production.