Iran and Russia sign major oil deal

Russian company, Gazprom, agrees to multi-billion dollar deal which includes developing oil, gas fields.

By THE MEDIA LINE NEWS AGENCY
July 14, 2008 13:23
1 minute read.
Iran and Russia sign major oil deal

Iranian Oil 224.88. (photo credit: AP)

A few days after French oil giant Total withdrew from its planned multi-billion dollar gas investment project in Iran, Russia's Gazprom is entering the market in a multi-billion-dollar deal. Gazprom's Chief Executive Alexei Miller met on Sunday with Iranian President Mahmoud Ahmadinejad and went on to sign an agreement for developing Iranian oil and gas fields. Iran, according to the agreement, has offered Gazprom an extended package for the development of oil and gas fields; construction of refineries; transfer of oil from the Caspian Sea to the Sea of Oman; development of Iran's North Azadegan oil field; exchange of technology and experience; and the possible participation of Gazprom in the planned pipeline between Iran, India and Pakistan. Azadegan is Iran's biggest onshore oil field with an estimated 42 billion barrels of crude oil. Iranian firms began working on the field in February after the Japanese partner, Inpex, quit the project. The accord also includes the future formation of a joint company between the two countries, for cooperation in oil and gas. Official reports from both countries have not yet revealed if the South Pars gas field will also be part of the deal. Last week, France's Total decided to freeze its investments in South Pars, following Iran's test-fire of long-range missiles. "After Total's announcement that because of political risk they do not want to commit themselves to the South Pars multi-billion-dollar project, it was natural that Iran would continue and expedite its current negotiations to use other companies," Manouchehr Takin of the UK-based Center for Global Energy Studies, told The Media Line. The South Pars field in the Gulf has around 500 trillion cubic feet of gas, which accounts for about eight percent of the world's gas reserves. Takin was however skeptical regarding whether or not it was the American pressure on European companies that made Total withdraw from the project. "I think it is more within Total's shareholders and board of directors, who have looked at every aspect, and decided not to take too much political risk in their portfolio," he said. "However, I do agree that one cannot help but think of the pressure from the US Department of Treasury, who had been directly talking to managements of banks and big companies, twisting their arms not to get involved with Iran," Takin added. The Media Line News Agency


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