(AFP) – Jul 13, 2008
TEHRAN (AFP) — Iran and Gazprom Sunday signed an agreement for the Russian energy giant to help Tehran develop its oil and gas fields, days after Total dropped out of a multi-billion-dollar gas deal.
"The Iranian National Oil Company and Gazprom signed an agreement in which the two sides will cooperate in the development of Iran's oil and gas fields," the oil ministry's Shana news agency said.
No financial details were given but the agreement signals Iran's determination to secure Russian help for exploiting its energy resources as Western countries pull out due to political pressure.
The head of French energy giant Total last week said it was dropping out of a multi-billion-dollar gas investment to develop phase 11 of the South Pars gas field, saying it was currently too risky politically to invest in Iran.
Western governments have pressured firms to cut their ties with Iran over the country's controversial nuclear programme, which world powers fear could be aimed at seeking atomic weapons -- a charge vehemently denied by Tehran.
The United States, Iran's arch enemy, has also been urging global energy giants to cut their ties with Tehran, saying that doing business sends the wrong message at a time of growing tensions in the nuclear crisis.
"Gazprom will be a cooperative partner for the Islamic Republic of Iran," Iranian state television quoted Alexei Miller, CEO of the Russian state-controlled firm, as telling President Mahmoud Ahmadinejad in a meeting.
Other issues covered in the cooperation agreement include possible participation of Gazprom in the planned peace pipeline that would deliver Iranian gas to India and Pakistan, Shana said.
Improving recovery rates in Iran's ageing oil fields and Russian help in transferring Caspian Sea crude oil to the Gulf of Oman are also mentioned.
Cooperation in the development of Iran's North Azadegan oil field, part of the vast Azadegan filed in southwestern Iran, was also mooted in the agreement, Shana said.
It said that working groups would be formed to implement the cooperation and a joint company would be set up between the two countries for cooperation in oil and gas.
State television said Miller expressed willingness for Gazprom to participate "in big oil and gas projects; in South and North Pars, Azadegan and the Caspian Sea fields."
Ahmadinejad, for his part, said that Iran was "interested in expanding ties with Russia in oil and gas as far as possible," state television said.
The South Pars field in the Gulf has around 500 trillion cubic feet (14 trillion cubic metres) of gas, which represents about eight percent of world reserves.
But the lack of foreign investment has so far delayed the development of the giant offshore field and dented Iran's hopes of becoming a major gas exporter.
Azadegan is Iran's biggest onshore oil field with an estimated 42 billion barrels of crude oil in place and production started in February using only Iranian firms after the Japanese partner Inpex quit the project.
Iran sits on the world's second largest proven oil reserves worldwide and is the number four crude producer worldwide and the second in the oil cartel OPEC.
It also has the second biggest proven global gas reserves after Russia but so far has played only a minor role on the gas export market.
Russia, while approving three sets of UN sanctions against Tehran, has repeatedly argued the nuclear standoff should be solved through diplomacy and still has significant economic interests in Iran.
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