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Tehran to seal oil sale deal with Moscow within weeks

Oil Minister Zanganeh announced that agreements have been reached with Russia over signing a crude sale deal to the Eurasian country by March 05.

Tehran to seal oil sale deal with Moscow within weeks
(Friday, March 31, 2017) 13:01

Speaking on the sidelines of a meeting with the Russian Energy Minister Alexander Novak, Iran’s Minister of Petroleum Bijan Zanganeh said “one axis of talks revolved around presence of Russian firms in tenders for development of Iranian oil and gas fields as well as signing new contracts.”

“It was agreed that Iran will hold a workshop in Russia’s Saint Petersburg half way through the upcoming Iranian calendar year (to begin March 21) to introduce new model of oil contracts dubbed Iranian Petroleum Contracts (IPCs), said the official adding “it is also expected that a contract for daily sales of 100 thousand barrels of crude oil to Russian will be inked in early March.”

The senior oil official said 50% of oil revenues will be received in cash while the other half will be settled through imports and exports of goods or technical and engineering services.

Zanganeh, while emphasizing that Iran is faced with no difficulties for signing oil sale contracts, said the intended volume of crude will be shipped to out of Russia and the agreement is expected to form a long-term trade and commercial relations with the Russians.

At another part of his remarks, Iran’s oil minister said negotiations were still underway with Iraq over swap of crude oil at Kirkuk oil fields explaining “talks were conducted with Iraqi Oil Minister ‎Jabbar al-Luaibi on Monday and it was agreed that an international consultant be hired to investigate all possible options and analyze economic justification of oil transfer or swap before a final method is adopted.”

He recalled that in case the oil swap project becomes operational, Iraq’s Kirkuk will be able to supply the required feedstock to certain Iranian refineries like Arak, Kermanshah, Tehran and Tabriz complexes; “as such, negotiations will be pursued with the Iraqi side.”

Later, Bijan Zanganeh recounted on the latest status of talks with India’s ONGC over expansion of Farzad B gas field stating “no agreement has been reached yet and the proposed price by Indians resides way too higher than the figure intended by Iran.”

“In case the Indian side plays more delaying tactics, development of Farzad B is likely to be assigned to a different company,” he underscored.

The official also expounded on causes of delay in gas exports to Iraq stressing that the most major bottleneck was the tough restrictions applied by an Iraqi commercial bank as regards reopening Lines of Credit (LCs).

Iran’s minister of oil noted that the issue had been discussed with the Iraqi sides during his Monday visit to the neighboring country asserting “as announced by Iraq, presently no security barrier exists to launch of gas exports.”

At the end of his remarks, Zanganeh announced that the gas pipeline from South Pars to Zahedan and Sistan and Baluchestan provinces will be inaugurated by President Rouhani before the end of February though no exact dates are known for operation of South Pars phases.

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