Iran, Russia ink $1bln worth of oil deal
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Xinhua, December 19, 2011
Iran signed an oil contract worth one billion U.S. dollars with a Russian oil company on Sunday, the state IRIB TV website reported.
The Iranian Petroleum Engineering and Development Company and Russian Tatarstan republic's Tatneft Oil Company signed a memorandum of understanding (MoU) on development of Zagheh oil field in southern Iran.
The contract, which was inked in the presence of the President of Russian republic of Tatarstan Rustam Minnikhanov and Iranian Oil Minister Rostam Qasemi, is aimed at developing Iranian Zagheh oil field in Iran's Bushehr province on the Persian Gulf coast, said IRIB.
In the first stage to be completed after two years, the country will produce 7,000 barrels of heavy oil per day and in the second phase, after 5 years, the production capacity will increase to 55, 000 barrels per day (bpd), according to the report.
The preliminary contract will be finalized after 3 months when the technical studies are completed, said the report without specifying the value of the contract.
According to the Oil and Energy Information website affiliated to Iran's Oil Ministry, Qasemi said Sunday that Iran and Russian's Tatarstan republic will boost cooperation in oil sector.
Speaking on the sidelines of the signing ceremony, he said that by getting help from Tatarstan republic's experiences and Russian know-how Iran will develop its heavy crude oil fields.
Three dimensional seismic operations and data processing are among the work carried out previously in the field, the website said, adding that the development of Zagheh oil field will also be funded by Iran's private bank of Tat.
On Sunday, Minnikhanov expressed his country's readiness to contribute to Iran's oil industry by offering its oil and gas technology, the official IRNA news agency reported.
He said that Tatneft Oil Company enjoys very good experiences in heavy oil exploration and is ready to cooperate with Iranian oil industry by making use of its technology, according to the report.
On Saturday, the visiting Tatar president termed development of Iran's South Pars gas field in Assalouyeh, in southern province of Bushehr, as "unbelievable," said IRNA.
He noted that his country attaches great importance to its petrochemical activities, underlining the need for enhanced bilateral ties between Iran and Russia.
Iran is under Western sanction pressure for international investments and developments of its oil and gas projects over its controversial nuclear program which the West claims that might aim at weapon grade. The Iranian government strongly rejects the allegations.
Several Western energy investors, including Total and Shell, have already withdrawn from the country's energy projects.
In October, Iran said that it had replaced Russia's Gazprom by Iranian companies in Azar on-shore oil field after it failed to come up with its obligations to finalize the project.
According to the local English-language Tehran Times daily, although several big multinational oil companies have left Iran's oil and gas projects in recent years under U.S. pressure, Iran has been able to circumvent such pressure by attracting small and medium firms.
Iran, a member of the Organization of Petroleum Exporting Countries (OPEC), is the world's fourth largest oil producer with an output of about 4 million barrels per day. The country's recoverable oil reserves are estimated at over 137 billion barrels, or 12 percent of the world's total.
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