Russia and Iran sign $30bn energy agreements


FT reported that Russia and Iran have signed agreements to collabourate on “strategic” energy deals worth up to $30bn that will involve energy groups such as Rosneft and Gazprom. Amir Hossein Zamaninia, Iran’s deputy oil minister for international affairs, said six provisional deals had been signed with Russian oil companies as part of a visit by President Vladimir Putin to Tehran last Wednesday.

Mr Zamaninia said the two countries agreed to “strategic co-operation in the energy sector”, ranging from development of Iran’s oil and gasfields to collabouration on research. Igor Sechin, chief executive of Russia’s state-controlled Rosneft, said its pact with the National Iranian Oil Company would be the first step before a “binding” deal to participate in Iran’s oil and gas projects over the next few years. “According to preliminary calculations, the overall amount of investments in the projects will total up to $30bn. When completed, the production plateau will reach 55m tonnes of oil per year,” Mr Sechin told journalists invited to the signing. Mr Sechin, a close associate of Mr Putin whose international ventures often dovetail with Kremlin foreign policy, said co-operation with Iran included “carrying out swap operations, supplying oil and oil products, training staff and modernising oil refining”.

Iran needs $200bn of investments for upstream and downstream projects by 2021. Since Iran struck a nuclear deal with major powers in 2015, enabling many sanctions to be lifted, it has only signed one notable contract — a deal with France’s Total in July worth $4.8bn. Iran is particularly keen to strike deals with western players such Royal Dutch Shell to prove that the US’s hostility toward Iran has not scared off foreign investment. However, oil experts say that, should the US re-impose crippling sanctions on Iran by the end of this year, Russian and Chinese firms could benefit from the lack of competition from western companies. Russia and Iran have long been working on oil-for- goods deals worth up to $20bn, since cash-strapped Iran has been under western sanctions over its nuclear programme. Under these agreements Moscow would buy Iranian oil in exchange for Russian equipment and technology.

Moscow has forged a close relationship with Saudi Arabia, and has leveraged a supply curbs deal with Opec to strengthen ties with the kingdom in the energy and military sectors. Can Russia though translate its current relations with Iran and Saudi Arabia into bringing harmony within the boiling Middle East and earning it self a long term economic partnerships along with a peace Noble prize.


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