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Russia is getting ready to invest US$50 billion in Iran’s oil and gas industry as the two countries continue to seek closer ties, just as the United States is looking to cut as much Iranian crude oil exports from the market as possible.
“Russia is ready to invest $50bn in Iran’s oil and gas sectors,” according to Ali Akbar Velayati, Senior Adviser for International Affairs of the Supreme Leader of the Islamic Republic, as carried by the Financial Times.
Velayati was on a visit to Moscow that included a meeting with Russian President Vladimir Putin.
“Military and technical co-operation with Russia is of major importance to Iran,” FT quoted Velayati as saying.
“The discussion focused on Russian-Iranian cooperation issues as well as the situation in the region, including developments in Syria. The parties reaffirmed their commitment to the Joint Comprehensive Plan of Action on Iran’s Nuclear Deal (JCPOA),” the Kremlin said in a brief statement on the meeting on Thursday.
According to the Iranian official, a Russian oil company has signed an agreement with Iran worth US$4 billion, and that deal “will be implemented soon.”
Russian energy giants Rosneft and Gazprom have also started talks with the oil ministry of Iran to potentially sign deals worth up to US$10 billion, the Iranian adviser said, while a Russian government official confirmed to FT Russia’s US$50-billion investment plans.
Earlier this year, a local Iranian company, Dana Energy, in a consortium led by Russia’s Zarubezhneft, signed an agreement with the National Iranian Oil Company (NIOC) to redevelop the Aban and West Paydar oilfields, with total capex estimated at around US$740 million.
Separately, Russia’s Energy Minister Alexander Novak said on Friday that Russia was studying all legal implications for a possible deal with Iran under which Moscow would provide goods to Tehran in exchange for oil. Such a deal is still possible, Novak said.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Iran gives oil and in return gets junks from Russia!!
Russia will therefore defy US sanctions on Iran and invest in Iran’s oil and gas industry.
Iran is aiming to increase its oil production to more than 4.5 million barrels a day (mbd) in coming years. Moreover, Iran sits on the world’s largest proven reserves of natural gas. Most of its gas reserves are undeveloped because of lack of investment. That is why any investments including Russian investments are more than welcome.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London
Russia does benefit from Iranian feet on the ground in Mid-east countries like Syria. From Putin's point of view, Iran is a kind of "stability" in a key oil producing region. Russia's interest in a stable Iran is strategic.