Iran’s oil-for-goods barter with Russia to begin soon: Official
Iran’s crude oil exports to Russia under an oil-for-good barter scheme will begin in the near future, said deputy oil minister on Saturday. Ali Kardor said banking problems pertaining to the exports of Iranian oil to Russia has been resolved, making it possible to open letters of credit (L/CS), Shana reported.
Iranian and Russian officials have announced several times the imminent launch of the long-heralded arrangement which has not come through. Whether it will finally kick in this time has to be seen.
The arrangement dates back to 2014 under which Moscow would buy up to 500,000 barrels per day (bpd) of Iranian oil in exchange for Russian equipment and goods. It called for swapping around 300,000 bpd via the Caspian Sea and the rest from the Persian Gulf.
For now, the two sides are considering shipping 100,000 bpd of Iranian oil to Russia, with supplies being either physical or swap-based, according to Russian Energy Minister Alexander Novak.
Kardor said Iran is about to receive 50 percent of payment in euros and the rest in goods and services.
Russian oil and gas companies have signed a series of Mous with Iran where Lukoil, Gazprom and Zarubezhneft plan to develop Paydar Gharb, Abteymour and Mansouri oilfields.
On Wednesday, Russia’s state-owned Rosgeologia said it was in talks with Zarubezhneft, Gazprom Neft and Lukoil on joint implementation of projects worth $1.5 billion in Iran, TASS reported.
“Of course, we are negotiating ... Major companies have already announced their participation in joint projects on Iranian territory. Accordingly, we can act in tandem regarding geological exploration and service operations, and we are involved in it now,” Rosgeologia CEO Roman Panov said.
According to the National Iranian Oil Company (NIOC)’S exploration head Saleh Hendi, negotiations were underway with Lukoil, Rosneft, Zarubezhneft, Tatneft, Gazprom and Gazprom Neft to turn Mous to firm contracts for the development of more than 10 oil and gas fields in Iran.
Speaking to Russia’s Sputnik news agency, Hendi said Russian companies can acquire better shares in Iran’s oil and gas market by establishing strategic alliances with European, Chinese and Southeast Asian companies.
Iran, however, had reservations about solutions offered by Russian oil companies to develop Iranian deposits because they were ‘insufficiently effective’ and Tehran had asked the firms to improve them.
“We have not had a serious executive project with Russian companies in the upstream sector so far, but about recent received proposals and negotiations, unfortunately, it should be noted that the key indexes of proposals submitted by Russian companies are too conservative, less economic, and too expensive,” Hendi said.
“Iran’s Oil Ministry informed the Russian energy minister and Russian companies about these issues and a comparative report was also presented which made Russian authorities and companies convinced that they should make some improvements to their proposals,” he added.
Meanwhile, on Friday, Iranian Minister of Roads and Urban Development Abbas Akhoundi and Russian Minister of North Caucasus Affairs Lev Kuzentsov in a meeting in Moscow called for enhancing mutual cooperation in economic and trade fields.
During the meeting, Akhoundi and Kuzentsov called for enhancing cooperation between Caucasus and Iran’s northern provinces.
The two ministers discussed bilateral ties, including economy, trade, tourism, transportation and shipping.
Akhoundi said that enhancing cooperation would lead to flourishing the shipping industry in the Caspian Sea within the framework of mutual cooperation as well as establishing commercial and passenger flights between the North Caucasus and Iran’s northern provinces.
Kuzentsov called for further cooperation between Iran and the Muslim majority provinces and Republics of Russia on agriculture and food products, arguing that Halal industry is just one of the potential fields for cooperation between the regions and Iran.