Baku, Azerbaijan, Nov. 6
By Farhad Daneshvar – Trend:
Initial agreements for cooperation between Iran and Russia in oil sector have appeared amid growing speculations over a possible decision by the US administration to slap new sanctions on Tehran.
The Islamic Republic once appeared passionately interested in collaboration with the western producers like Shell and Total, but the recent initial agreements with Russian companies, including Gazprom and Rosneft, have cast shadow over Iran’s plans to continue cooperation with European oil producers.
Following the implementation of the Joint Comprehensive Plan of Action (JCPOA), aka nuclear deal, back in January 2016, Tehran cherished hopes that cooperation with western giants would develop its ageing upstream and downstream sectors.
However, the recent talks with Russian companies last week were taken by a group of observers as an indication of Tehran’s distrust in the western partners.
Iranian and Russian officials during President Vladimir Putin’s visit to Tehran on Wednesday inked six initial agreements, including two documents with Gazprom and two other MoUs with Rosneft.
While Iran in order to develop its oil and gas industry deeply needs to lure about $200 billion in investment by 2021, this group of observers suggests that any possible decision by the US to re-impose sanctions on the Middle Eastern nation’s energy sector would pave the way for Russian companies to grab a larger share from the Islamic Republic’s huge market.
Commenting on the country’s decision to cooperate with Russia, Iranian Oil Minister Bijan Namdar Zanganeh said that the recent deals with Russian companies will help his country confront US President Donald Trump's "unilateralism".
The outline deal with Rosneft includes cooperation on several projects worth up to $30 billion, paving the way for legally-binding documents to be signed within a year. According to Rosneft’s head, Igor Sechin, the output from the joint project is seen plateauing at 1.1 million barrels per day.
Tehran’s “strategic cooperation” with Gazprom also envisages developing Iranian gas fields with subsequent gas transportation and monetization, including through liquefaction and petrochemical production. The sides in the meantime have agreed to collaborate on a project for the construction of the Iran-Pakistan-India gas pipeline.
While Iranian leaders have pinned considerable hope in cooperation with the Russian giants, rumors about the productivity and transparency of the Russian companies are flying around.
Both countries heavily rely on hydrocarbon resources, but they apparently lack sufficient technologies and funds to develop their own oil and gas industries. On the other hand, it seems that the sides have, so far, failed to draw up a clear scheme to show how the investments will be split between Iranian and Russian companies.
It appears that today’s political landscape and the risks of a new series of western-imposed sanctions on both Tehran and Moscow have encouraged the regional allies to join efforts aimed at deepening bilateral ties through every possible means.