Russian oil company willing to invest in major Iran oilfield

By Sara Rajabova

The recent improvement in Iran’s relations with the Western countries and the possibility of soonest removal of the international sanctions on the country has tackled the competition among the energy companies for the vast Iranian market.

The European companies one by one voice readiness to enter the Iranian market once the sanctions are lifted. Iran’s long-time ally Russia, which does not want to stay behind the Europeans, is striving to gain an advantage in Iran’s oil and gas projects.

Russian state-owned oil company Zarubezhneft is reportedly willing to develop a major oilfield in western Iran which is projected to come online with an investment of $2.2 billion.

Zarubezhneft Chief Executive Nikolay Brunich has announced his company’s readiness to participate and invest in the development of Changuleh field in Iran’s Ilam province, Mehr news agency reported.

He traveled to the city during a recent visit by Russian Energy Minister Alexander Novak to Iran in October and signed a letter of intent with the governor of Ilam, besides discussing the construction of an oil refinery.

After visiting Tehran, Novak said Zarubezhneft would take up several projects worth a total of $6 billion in Iran’s oil industry. The company will send a team of experts to Ilam "soon" to examine the field, according to the report.

Changuleh is part of the Anaran onshore block linked to the Azar field which Iran shares with Iraq.

In August, executor of the project Ali Abbasi Laraki said Iran planned to develop Changuleh in two phases to produce 15,000 barrels per day in the initial stage before raising output to 50,000 bpd.

The field will be introduced to prospective developers at a Tehran conference which is to be held in less than a month in order to unveil Iran’s new oil contract models.

Zarubezhneft, created during the Soviet period, represents Russian state interests in overseas oil projects. Its biggest project to date is in Vietnam, where it has run the Vietsovpetro joint venture with state firm Petrovietnam since 1981.

The company has been for long considering participating in Iran’s upstream projects. It has been reportedly involved in discussions with officials from the National Iranian Oil Company since 2008 when the former president Mahmoud Ahmadinejad (2005-2013) was in office.

The company was involved in a project to drill a 6,000-meter oil exploration well in the Caspian Sea for Iran in the 90s.

Russia’s second largest oil producer, Lukoil, also seeks to return to the Azar field which it left in 2011 after the U.S. and the Europeans intensified sanctions on the Islamic Republic.

However, an Iranian official has recently said Lukoil is not needed to participate in the first phase of Azar oilfield development plan.

International energy companies are positioning themselves for new opportunities in Iran. Energy officials say the country has identified nearly 50 oil and gas projects worth $185 billion for development.

Iran sits atop one of the world's largest natural gas reserves of over 33 trillion cubic meters and, in the near future, the country is set to increase its gas processing and transfer capacity to one billion cubic meters per day from the current level of 600 million cubic meters per day.

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Sara Rajabova is AzerNews’ staff journalist, follow her on Twitter: @SaraRajabova

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