Iran to Sell Oil to RussiaIran's petroleum minister ...

Iran to Sell Oil to Russia

Iran's petroleum minister announced agreement for the Islamic Republic to sell 100,000 b/d of crude oil to Russia.

Bijan Zangeneh made the remarks following a meeting with Russian Energy Minister Alexander Novak in Tehran.

"This agreement will be finalized soon," said Zangeneh.

The Iranian minister said that half of the value of oil cargoes shipped to Russia would be paid in cash.

"The remainder will be spent on financing goods Iran needs to import from Russia," he added.

Zangeneh said a Russian company would export Iran's oil to outside Russia to certain destinations.

He noted that Iran would receive the 50% cash within one month after the delivery of oil cargoes.

Zangeneh said Iran-Russia agreement would not be a barter trade, rather purchasing commodities and services with oil money.

"We are to export 100,000 b/d of oil to Russia and its relevant agreement will be soon signed and will take effect," he added.

Zangeneh said the Russians could load oil whenever they would be ready.

"We welcome this measure in a bid to diversify our customers and have better access to oil markets," he added.

"During the meeting with the Russian minister of energy, we held talks about the Russian companies' interest for presence in the development of Iranian oil fields and signature of new deals based on new-style oil contracts," said Zangeneh.

The minister said that many memorandums of understanding had been signed between National Iranian Oil Company (NIOC) and Russian companies.

"In some of these MoUs we are waiting for financial and technical proposals of the Russian side. In some others we have held talks to a more advanced stage, including with Lukoil," he added.

Zangeneh said a workshop was planned to be held in Moscow or Saint-Petersburg early next Iranian year to outline Iran's new type of oil contracts for Russian companies.

MoU on Kirkuk Oil Pipeline Study

Iraq and Iran signed a memorandum of understanding to study the construction of a pipeline to export crude oil from the northern Iraqi fields of Kirkuk via Iran.

The agreement was signed in Baghdad by Iran's petroleum minister Bijan Zangeneh and Iraqi Oil Minister Jabar al-Luaibi.

It also calls for a commission to solve a conflict about joint oilfields and the possible transportation of Iraqi crude to Iran's Abadan refinery.

Zangeneh said an international consultant would be picked to conduct studies on the technical and economic justification of the project.

"The international consultant will review a variety of options for this proposal based on a framework which we will set, including technical and economic justification both about selling Kirkuk's oil to Iran and swap," he added.

Zangeneh said Iran would prefer swap cooperation, adding: "We can receive part of feedstock we need for refineries in northern and western Iran, stretching from Arak to Kermanshah, Tehran and Tabriz, in this way. However, its amount depends on receiving a report from the international consultant and we should make decisions on that basis."

Zangeneh said Iran was ready to export gas to Iraq, but it was up to Iraqis to open letter of credit (LC).

The Iranian minister said LC opening faced some challenges due to the Iraqi banking system's sensitivity to this issue.

"I hope that this problem would be resolved in coming days so that we would be able to start gas export to Iraq. For the moment the Iraqis say they have no security on their side," said Zangeneh.

Iran's deputy petroleum minister for international affairs and commerce, Amir-Hossein Zamani-Nia, said: "Iran is ready to export 14 mcm/d of gas to Baghdad and a total of 50 mcm/d is planned to be exported to Baghdad and Basra."

He referred to two MoUs signed earlier this year, saying: "An MoU was signed on the development of two small jointly owned fields – Parviz (South Naft Khaneh) and Khorramshahr (Sindbad) – and another one on oil industry cooperation including construction of pipeline to carry crude oil and petroleum products between the two countries, manufacturing of equipment, gas exports, renovation of Iraqi refineries and training manpower."

Zamani-Nia said the first MoU on joint fields was signed without any changes by the oil ministers of the two countries. A joint committee is to be set up to discuss the development of these fields.

He said that the second MoU was about connecting Iranian and Iraqi crude oil and petroleum products pipelines.

"By building these pipelines, it would be possible to deliver crude oil from Basra to Abadan and petroleum products from Iran to Basra," said Zamani-Nia.

He added that Iran's gas exports to Basra and Baghdad were included in the second MoU.

Once the project is completed, he added, Iran would be exporting a total of 50 mcm/d of gas to the power plants in the two Iraqi cities.

"In the light of the completion of the first and the second phases of gas supply to Baghdad, it is now possible to export 14 mcm/d of gas to power plants in Baghdad," he added.

Iran, Sweden Mull Energy Efficiency Cooperation

Iran welcomes cooperation with Swedish companies in energy efficiency and greenhouse gas emissions reduction projects, Minister of Petroleum Bijan Zangeneh said.

Zangeneh made the remarks following a meeting with Sweden's Minister of EU Affairs and Trade Ann Linde.

"In this meeting we held talks about cooperation between Iranian and Swedish companies," he said.

Zangeneh said the Swedish minister and her accompanying delegation discussed energy efficiency, energy saving and CO2 emission reduction projects, adding: "We welcome [cooperation in] these sectors."

He referred to the start of cooperation with Sweden's Scania and Mammut for the manufacturing of heavy vehicles, saying: "In these negotiations we recommended the Swedish companies to cooperate with Iranian companies in the manufacturing of gas-fueled buses to be used in urban transportation."

Zangeneh said the Swedish delegation did not demand cooperation with Iran in the upstream oil sector.

"We are willing to cooperate with Swedish companies in reducing flare gases or enhancing thermal output in petroleum industry installations. Of course, we can support such projects within legal frameworks," he said.

Total Set to Develop SP11

The managing director of National Iranian Oil Company (NIOC) has said France's Total is determined to develop Phase 11 of South Pars gas field.

Ali Kardor said the French giant had already started investing $15 million in this field as per the first phase of its contract.

He said a Total team recently visited Iran and reaffirmed its willingness to continue cooperation.

"The stages of signature of contract between NIOC and Total-led consortium are under way on schedule and there is nothing to worry about," said Kardor.

Iran recently signed first post-sanctions heads of agreement with a Total-led consortium which also includes China's CNPC and Iran's Petropars to develop Phase 11 of the giant reservoir which Iran shares with Qatar in the Persian Gulf.

He said the agreement for the South Pars development was valued at $4.2 billion, adding: "In the first stage, $15 million will be invested. Technical and engineering work is under way."

Regarding talks with other companies for the development of oil fields in Iran, Kardor said: "Negotiations with four companies including Denmark's Maersk for the development of the oil layer of South Pars, with Russia's Lukoil for Ab Teimour and Mansouri, Germany's Wintershall for small fields in the west and with France's Total for Phase 11 of South Pars are being finalized."

South Africa Willing to Build GTL Plant in Iran

South Africa's minister of energy has expressed her country's willingness to help build a gas-to-liquid (GTL) plant in Iran.

Tina Joemat-Pettersson, who met with Iran's Minister of Petroleum Bijan Zangeneh in Tehran on March 4, said South Africa would like to buy crude oil and petroleum products from Iran.

Joemat-Pettersson headed a delegation to Tehran ahead of Iranian President Hassan Rouhani's planned visit to South Africa.

She discussed with Zangeneh investment by South African companies in Iran.

After their meeting, Zangeneh said: "In case there is will in Pretoria, purchase of cargoes of crude oil and oil products could come to fruition sooner than other affairs because South Africa meets all its needs through imports."

He said that South Africa may need to import 100,000 b/d of crude oil.

Noting that South Africa is willing to provide its required crude oil via its state-run oil firm, Zangeneh said: "South Africa must use the oil purchased from Iran where it would not be subject to decision-making by foreign companies."

He said that South Africa's PetroSA and Iran's National Petrochemical Company (NPC) had held direct talks.

"South Africa owns GTL technology and we held talks with them to that effect in previous years, but due to lack of agreement on the price of gas we failed to reach any conclusion," said Zangeneh.

"In case of agreement on the price, we are willing to cooperate. If there is a favorable perspective for investment it will be possible for Iranian companies to build partnership with them, and we will supply them their required gas at an agreed price," he added.

Joemat-Pettersson also met with NPC managing director Marzieh Shahdaei and spoke about South Africa's potentialities for cooperation with Iran in the petrochemical industry.

On the sidelines of the meeting, Shahdaei said: "Fruitful talks were held on investment and the South African private sector's cooperation with Iran's petrochemical industry. We talked about construction of a GTL unit by this country."

"Earlier, [Iran's] Research Institute of Petroleum Industry and a South African company had reached agreement about the construction of a GTL unit,and studies had started for building such a unit, and today it was agreed to finalize the [plan for the] construction of the unit utilizing the technology of the South African company and to draw up a draft agreement," she added.

For her part, Joemat-Pettersson expressed hope that Iran and South Africa would sign an agreement for GTL plant construction during President Rouhani's future visit to South Africa.

She said South Africa's private companies were willing to cooperate with Iran and conduct joint venture deals with Iran's private entities.