Gazprom Wins Toehold in Iran Oil
Last autumn was a new season for Iran's oil and gas sector. Despite the extension of the Iran Sanctions Act (ISA) by the United States, Iran has signed three heads of agreement (HOA) with oil giants.
After signing HOA with France's Total and Royal Dutch Shell, National Iranian Oil Company (NIOC) signed a deal with Russia's giant Gazprom.
An agreement was signed with the Russian company to conduct studies on two oil fields in Iran. Russia has now seven fields under study in Iran.
The ground became more prepared for cooperation between Tehran and Moscow following a meeting between Iranian President Hassan Rouhani and Russia's President Vladimir Putin. The two countries had already cooperated in different sectors, but the level of cooperation had never been to such an extent.
The last agreement signed between Iran and Russia pertained to Cheshmehkhosh and Changouleh oil fields. The agreements were signed in the presence of Iran's Minister of Petroleum Bijan Zangeneh and Russia's Energy Minister Alexander Novak.
Salb-Ali Karimi, CEO of Iranian Central Oil Fields Company (ICOFC), signed the deal on behalf of NIOC, while Alexander Dyukov, CEO of Gazprom Neft, was representing the Russian side.
Lukoil, Zarubezhneft in Iran
Iran's Minister Zangeneh said a number of Russian companies have held talks with NIOC with a view to developing oil fields and recovering oil.
"Lukoil has signed HOA for conducting studies on Ab Teimour and Mansouri fields, Zarubezhneft for Aban and Paydar Gharb fields, and Tatneft for the development of Dehloran field," he said.
HOA in Gas Sector
The HOAs were not limited to oil projects. Hamid-Reza Araqi, CEO of National Iranian Gas Company (NIGC), signed an HOA with Alexander Medvedev, deputy CEO of Gazprom.
The signature of this HOA was a result of last year's visit to Iran of a 30-member business delegation from Gazprom to discuss grounds for cooperation.
Due to the extent of work in the gas sector, five working groups were agreed to be set up. These working groups specialized in gas trading, research and development, production and joint project, gas utility, etc.
Now more than one year after the first meeting was held between NIGC and Gazprom, an HOA was signed based on the outcome of meetings held throughout working groups over the past year.
As two owners of huge gas reserves, Iran and Russia are often seen as rivals. But Araqi said Iran and Russia enjoy potential to create joint international gas market in the light of their abundant gas deposits.
"Iran-Russia joint markets created conditions to let us feel that we share interests with Gazprom. We will have regular expert-level meeting between our working groups and we hope that this HOA will turn into a contract," he said.
Araqi also said that Iran and Russia had potential to cooperate in gas swap projects.
"Since [our] gas production capacity will reach 1 bcm up to next year we will need to store gas in order to ensure a stable gas supply in all seasons. When we want to guarantee sustained gas supply to various sectors we have to take into consideration storage. Russia has had good achievements in underground gas storage and we can cooperate in this sector," he added.
Gazprom Welcomes Iran Gas Projects
Medvedev also voiced his company's interest in cooperating with Iran throughout the gas value chain.
"This company is interested in cooperating with Iran in exploration, gas production, liquefied natural gas (LNG) production and pipeline gas supply, including to India. We welcome presence in big projects in Iran's gas industry although they might be difficult," he said.
Medvedev said joint cooperation between NIGC and Gazprom would be based on common rules and regulations so that both sides would be content with the outcome.
"This company can cooperate with Iran in storage, even in other countries. We have already created 60 bcm of storage capacity in Russia and 5 bcm in other countries," he added.
"Currently, investment in storage in other countries with different geographical conditions is also under way," he said. "Expert working groups set up by NIGC and Gazprom will start their work within months."
Medvedev also referred to cooperation between the two countries in gas refinery construction, saying: "Gazprom is cooperating with Commonwealth of Independent States (CIS) in gas refinery building and it can have such cooperation with Iran, too."
"Russia and Iran are two countries able to cooperate in the gas sector and even drafting laws," he said.