Russian companies to invest in Iran if sanctions lifted

By Sara Rajabova

Russia will invest in Iran's energy sector if the U.S. and EU sanctions imposed on the country's economy for its nuclear program are lifted.

Russian Ambassador to Tehran Leon Jagarian said Russian oil companies will be willing to invest in Iran's energy sector once sanctions targeting Iran are lifted.

Jagarian said in an interview with Shana news agency that in case of a reversal of sanctions, Russia's oil companies will be eager to invest in Iran's oil and gas sectors.

He gave an upbeat assessment of the current level of relations between Iran and Russia, saying Iranian President Hassan Rouhani and Russian President Vladimir Putin held important talks in Kazakhstan's capital Bishkek on the sidelines of the Shanghai Cooperation Organization (SCO) summit in September.

Jagarian said in the framework of the agreements made at the summit, Iran's Oil Minister Bijan Namdar Zanganeh recently travelled to Russia and reached good agreements with Russian Energy Minister Alexander Novak.

Zanganeh travelled to Moscow on October 29 at Novak's invitation.

"We hope that we will soon see serious development of energy cooperation between the two countries,"he said.

During the two-day trip, Iran and Russia also discussed purchase of commodities and equipment required by Iranian companies, and the participation of Russian companies in Iran's petroleum industry.

Zanganeh's visit came on the heels of the ministerial meeting of the Gas Exporting Countries Forum (GECF), held in Tehran on November 3.

Jagarian said Russia holds a positive view of the presence of Russian oil companies in Iran's energy sector.

He added that Moscow is opposed to the unilateral sanctions against Iran, because "we are suffering from these sanctions".

Jagarian said Russia is seeking an effective oil and gas cooperation with Iran.

Lukoil Oil Company said in October that it would consider participating in oil and gas projects in Iran in case of international sanctions relief.

Earlier, another Russian company Zarubezhneftegaz announced its readiness to participate in the development of a newly discovered gas field in Iran.

The company will soon open an office in Tehran, an official with Zarubezhneftegaz said, adding that it is ready to participate in the exploration, drilling, extraction, and refining sectors of Iran's oil and gas industry.

Iran is one of the world's biggest oil and gas exporters and its economy is heavily dependent on energy revenues.

Crude reserves in Iran are estimated at 155 billion barrels, while gas reserves stand at 33.1 trillion cubic meters.

International sanctions have hampered Tehran's ability to deliver its crude oil to the market and receive payment.

According to the latest Platts survey of OPEC production for November 2012, Iran's oil production has fallen dramatically from an average 3.7 million barrels a day in 2011 to 2.7 million.

The United States and the European Union imposed sanctions on Iran's oil and financial sectors with the goal of preventing other countries from purchasing Iranian oil and conducting transactions with the Central Bank of Iran.

Iran's crude oil is subject to a European Union embargo that started on July 1, 2012.