MOSCOW (Sputnik) — Head of the National Iranian Oil Company's (NIOC) Exploration Directorate Seyyed Saleh Hendi has told Sputnik that Iran and Russian companies are discussing their participation in the exploration of oil and gas fields in the Islamic republic and in the shelf area.
"NIOC has already signed enough MOUs [memorandums of understanding] with Russian companies and now we are waiting for signing contracts and starting the execution of projects. According to the report I have received, NIOC has signed MOUs with Lukoil, Rosneft, Zarubezhneft, Tatneft, Gazprom and Gazpromneft and we are negotiating for more than 10 oil and gas fields development contracts."
The NIOC representative pointed out that cooperation on both offshore and onshore fields was under consideration. He also presented a list of oil fields that are the subject of talks between Iran and the Russian companies: Mansouri, Ab-Teymour, Kish, Yaran, Maroon, Southpars oil layer, Kupal, Aban, Esfandiar, West Paydar, Dehloran, North Pars, Azar, Changuleh and Cheshme khosh.
"Meanwhile, Russian companies can allocate more shares of Iran oil and gas market via establishing strategic alliances with European, Chinese and South Eastern Asian companies," Hendi added.
In particular, the NIOC head has commented on the cooperation with the Russian oil giant LUKoil.
"Since Iran has decided to use Russian companies’ capabilities, NIOC is… negotiating with other companies, and in the event [these foreign companies and Iran] win the contract they will create a partnership with LUKoil," Hendi said.
He pointed that the technical negotiations with LUKoil on the Mansouri and Ab-Teymour oil fields had already been finalized.
In Seyyed Saleh Hendi's opinion, the National Iranian Oil Company considers the solutions proposed by Russian oil companies to develop deposits on Iran to be insufficiently effective and asked to improve them.
"We have not had a serious executive project with Russian companies in 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 petroleum minister 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."
Iran has been re-entering the global oil market since January 2016, when the European Union, the United Nations, and the United States lifted their sanctions against the Islamic republic after the International Atomic Energy Agency (IAEA) verified Tehran’s compliance with the nuclear agreement reached in July 2015. However, Iran is a part of the Organization of the Petroleum Exporting Countries (OPEC) and non-cartel producers' oil output cut deal reached in 2016, which is tightening the growth of Iranian oil production.
According to President Vladimir Putin, Russia sees potential for expanding oil and gas cooperation with Iran.