Belarusneft to produce oil at Iranian Jofeir deposit

Other News Materials 6 September 2007 04:08 (UTC +04:00)

( RIA Novosti ) - Iran and Belarus have signed a contract allowing state-owned oil company Belarusneft to produce oil at the Jofeir deposit in Iran, Belarusneft's press service said Wednesday.

The contact was signed by Alexander Lyakhov, Belarusneft's general director.

"The two contract stages are worth some $450 million, and when the project comes to the final stage, oil production will total some 40,000 barrels a day," the service said.

The project will be funded by Belarusneft and the National Iranian Oil Company in amounts fixed by the agreement.

In early May, Belarusneft and the National Iranian Oil Company approved a general deposit production plan. Belarusian specialists studied the feasibility of remote oil production in Iran, estimated the Jofeir deposit reserves, and worked out technical documentation.

Two wells have already been drilled, and two oil-derricks shipped to the field. In September, geologic exploration of new layers of the deposit will begin.

During Belarusian President Alexander Lukashenko's visit to Iran in the fall of 2006, the two states signed a memorandum of understanding on oil field exploration.

Belarusneft plans to attract investment from Petrovietnam, the Vietnamese State Oil and Gas Corporation, which can finance 100% of the joint project in Iran. To that end, a joint venture (JV) will be registered in Vietnam.

If the Iranian party agrees, the JV will be the contractor for production at the Jofeir deposit, which lies in southern Iran.

Lukashenko has called for Belarus to diversify its energy sources, and he has boosted ties with both Iran and Venezuela.

Belarus's economy was jolted over the New Year after Russia doubled gas prices and removed preferential oil tariffs. About 50% of the oil Russia delivers to Commonwealth of Independent State (CIS) countries goes to Belarus. Russian oil supplies to Belarus made up 19.7 million metric tons in 2006.

In February 2007, a Petrovietnam delegation visited Belarusneft oil and gas group, negotiating joint ventures in Iran and Venezuela, and cooperation in gas and oil industry and other minerals.

Initial successes include an exchange of visits and the agreement between Belarusneft and Vietsovpetro.