Iran, Russia eye cooperation in oil and gas market, swap operations

By Aynur Karimova

The Moscow-Tehran cooperation in the energy sphere, as well as the two countries' capabilities of swapping oil and gas was high on the agenda of talks held between Iran's Oil Minister Bijan Namdar Zanganeh and Russian Energy Minister Alexander Novak in Tehran on March 14.

At a meeting with Novak, the Iranian minister expressed his country's interest in expanding cooperation with Russia and said that Tehran is following up a sustainable policy, strategic and long-term cooperation with Moscow, SHANA news agency reported.

Zanganeh believes that there are proper chances for cooperation between Tehran and Moscow in the post-sanctions era. As two major suppliers of oil and gas, Iran and Russia can cooperate in the world energy market and be influential in this respect, according to him.

He also urged the Russian companies to cooperate with Iran in the development of the country's oil and gas fields.

Novak, in turn, said that Iran has the right to be exempted from crude output cuts to stabilize the market with an aim to remedy the losses inflicted on its economy from international sanctions.

Speaking to reporters following a meeting with Zanganeh, he said the idea of exempting Iran from global production and export freeze was raised in light of fluctuation in oil market and price falls in the last 18 months.

"Major oil producers will coordinate with each other,” he said. “However, since Iran’s production decreased under sanctions, we totally understand Iran’s position to increase production and revive its share in the global markets.”

Novak believes that within the framework of major OPEC and non-OPEC oil producers, Iran is liable to have an exclusive way for increasing its oil production.

The removal of the international sanctions on Iran and the recent improvement of Tehran’s relations with the Western countries have tackled the competition among the energy companies for the vast Iranian market. Russia is among these states.

Russian companies are keen on participating in the development of oil and gas fields in Iran and eye projects for increasing Iranian oilfields’ recovery rate.

Furthermore, Tehran and Moscow have been in discussions on the swap of oil and gas over the past several years. Under a possible swap plan, Russia will supply oil and gas to northern Iran, and the Islamic Republic, in return, will be expected to deliver oil and gas on behalf of Russia to Moscow’s customers in the Persian Gulf.

Iran has a $4 billion worth project (11th cross-country pipeline) to deliver 110 million cubic meters of gas per day from South Pars gas field to the country’s north-eastern regions. On the other hand, the Islamic Republic has another $6 billion worth pipeline project to deliver the same amount of gas from South Pars to the north-western regions.

Iran also eyes boosting gas production from the current 700 million cubic meters per day to above 1.3 billion cubic meters per day by 2020-2021, enabling the country to export 200 million cubic meters per day of natural gas.


Aynur Karimova is AzerNews’ staff journalist, follow her on Twitter: @Aynur_Karimova

Follow us on Twitter @AzerNewsAz