The Forum for Partners in Iran's Marketplace
 
 
 
 
 
 
 
 
 
 
 
 
 
 
     

January 2018, No. 86


Trade & Business

Putin, Aliyev in Tehran for Three-Way Summit


Iran, Azerbaijan and Russia aim to link Bandar Abbas in southern Iran to Helsinki in Finland (Asia to Europe)



Russia and Iran signed agreements to collaborate on “strategic” energy deals worth up to $30 bn that will involve energy groups such as Rosneft and Gazprom.


On Nov. 1, Tehran hosted a three-way summit attended by Iranian, Russian and Azerbaijani presidents, which focused on boosting trade between the three sides, particularly the International North-South Transport Corridor project.

Russia and Iran signed agreements to collaborate on “strategic” energy deals worth up to $30 bn that will involve energy groups such as Rosneft and Gazprom.

Amir Hossein Zamaninia, Iran’s Deputy Oil Minister for International Affairs, said six provisional deals had been signed with Russian oil companies as part of a visit by President Vladimir Putin to Tehran on November 1.

After years of sanctions, the government of Hassan Rouhani has sought to attract foreign companies to develop Iran’s energy sector. The latest announcements come as Russia is building up its energy assets in the Middle East, as part of a wider diplomatic push to increase its economic and military clout in the region.

Zamaninia said the two countries agreed on “strategic cooperation in the energy sector”, ranging from development of Iran’s oil and gas fields to collaboration on research.

Igor Sechin, chief executive of Russia’s state-controlled Rosneft, said its pact with the National Iranian Oil Company would be the first step before a “binding” deal to participate in Iran’s oil and gas projects over the next few years.

“According to preliminary calculations, the overall amount of investments in the projects will total up to $30 bn. When completed, the production plateau will reach 55m tons of oil per year,” Sechin told journalists invited to the signing.

Iran is particularly keen to strike deals with Western players such as Royal Dutch Shell to prove that Washington’s hostility toward Iran has not scared off foreign investment. However, oil experts say that, should the US re-impose crippling sanctions on Iran by the end of this year, Russian and Chinese firms could benefit from the lack of competition from Western companies.

Iran needs $200 bn of investments for upstream and downstream projects by 2021. Since Iran struck a nuclear deal with major powers in 2015, enabling many sanctions to be lifted, it has only signed one notable contract — a deal with France’s Total in July worth $4.8 bn.

Sechin said cooperation with Iran included “carrying out swap operations, supplying oil and oil products, training staff and modernizing oil refining”.

Russia and Iran have long been working on oil-for-goods deals worth up to $20 bn, since cash-strapped Iran has been under Western sanctions over its nuclear program. Under these agreements Moscow would buy Iranian oil in exchange for Russian equipment and technology.

On the sidelines of the Tehran summit, Iranian and Russian officials signed six memorandums of understanding on improving collaboration in the field of oil and gas.

Rouhani has said Tehran welcomes Russian investors and private firms willing to undertake development and other projects in Iran. 

Linking Asia to Europe


Supreme Leader Ayatollah Ali Khamenei told visiting Russian president that Tehran and Moscow must step up cooperation to isolate the United States and help stabilize the Middle East.


Iran, Azerbaijan and Russia aim to link Bandar Abbas in southern Iran to Helsinki in Finland (Asia to Europe), Rouhani said in a joint press conference with Russian and Azeri counterparts in Tehran (Nov. 1).

“Transit between the three countries and also between Asia and Europe is the first decision that has been made by Iran, Azerbaijan and Russia,” Rouhani said while thanking Aliyev and Putin for attending the three-way summit in Tehran.

The next summit will be held in Moscow next year.

“Friendship, geographical neighborliness and cultural relations between the three countries made us resolute to take advantage of the capacity of trilateral relations,” he said, adding that the aim is to facilitate economic relations between the three countries.

Improving banking ties and paving the way for the three countries to use their national currencies in bilateral and trilateral trade exchanges were among other topics discussed by the three parties, he added.

 “In addition to economic issues, we discussed regional issues such as safeguarding the region, fighting terrorism and drugs trafficking and also Iran-Russia cooperation in maintaining stability and security in Syria,” he said.

Maintaining cooperation to finalize railway and road infrastructures within the framework of North-South Transport Corridor and following up agreements already signed on transit issues were among the most important topics discussed by the three parties. 

Gas Supply to Iran via Azerbaijan

Meanwhile, Russia said it is ready to deliver natural gas to northern Iran via the pipeline system of Azerbaijan.

Speaking after the Russian-Azerbaijani-Iranian talks, Putin said: “I would like to note that despite huge production of hydrocarbons in each of our countries, there is an interest to supply this feedstock to each other, taking internal logistics into consideration.”

“For example, we confirm our readiness to supply gas via pipeline transport systems of Azerbaijan to the north of Iran, which can be economically feasible for our partners,” Putin noted.

He voiced the confidence that Russia, Azerbaijan and Iran should not put up competition to one another in the market of energy resources and should coordinate their efforts instead.

“It is known perfectly well that Russia, Iran and Azerbaijan are important producers of hydrocarbon resources but this doesn’t mean we should compete with one another,” Putin said. “What this means is that we must coordinate our efforts.”

Gazprom to Help Build Iran-India Gas Pipeline

Russia’s state-controlled gas giant Gazprom will take part in a project for the construction of a gas pipeline between Iran and India, Russian media quoted Energy Minister Alexander Novak as saying (Nov. 1).

Russia and Iran signed a memorandum of understanding on Gazprom’s participation in the Iranian oil and gas sector (Nov. 1). By the end of this year, the parties will draft and sign the legal framework for the project, Novak said. Indian, Pakistani, Russian, and Iranian companies will be taking part in the project, the Russian minister said.

According to Russian media, the pipeline is expected to be 1,200 kilometers (746 miles) long and will transfer Iranian gas to India.

The parties will begin work on the project next year, after they will have signed all the legal paperwork later this year, according to Novak.

He noted that there will be an underwater section of the pipeline. It’s early to talk about the amount of investments, but they will be big because there will be an underwater section in the Persian Gulf—it’s a capital-intensive project, he said.

Novak also met with Iran’s Minister of Economic Affairs and Finance Masoud Karbasian in Tehran (Nov. 1). 

Regional Stability Underlined

At the summit, Rouhani said interaction between the three countries helps promote regional cooperation and stability, adding that Iran “welcomes any idea and mechanism that could strengthen relations among Tehran, Moscow and Baku”.    

The corridor, serving as a bridge to connect the railroads of Iran, Azerbaijan and Russia, is to provide faster and more efficient trade connectivity between Europe and Southeast Asia.

The three top officials also discussed ways of boosting trilateral energy cooperation, as well as joint efforts to combat terrorism and extremism, drug trafficking and transnational crime.

The presidents also exchanged views on the prospects of closer cooperation in the fields of culture, tourism and sports.

The first trilateral meeting was held in August 2016 in Baku where Rouhani, Putin and Aliyev discussed joint economic plans among other issues.

Aliyev also held separate meetings with the Leader and Rouhani.

Aliyev, who hosted a similar three-way meeting in August 2016, arrived in Tehran earlier on November 1 and held a first separate meeting with Rouhani.

Iran, Russia, and Azerbaijan share the Caspian Sea, and railway and road projects are expected to be discussed at their meeting.

Kremlin spokesman Dmitry Peskov told a conference call with reporters on October 31 that “Syria-related issues will be on the agenda of the Russian-Iranian bilateral talks.” He did not elaborate.

Russia is also one of the signatories of the 2015 international accord under which Tehran agreed to curb its nuclear program in exchange for sanctions relief.

The European Union and the other parties to the accord -- Russia, Britain, China, France, and Germany -- also have all urged Trump not to pull the United States out.

Speaking in Moscow on November 1, Russian Deputy Foreign Minister Sergei Ryabkov said that the deal must be preserved and that new sanctions should not be imposed on Iran. He called Trump’s demands for changes “unrealistic.”

Russia has also aided Iran’s nuclear energy program, making a major contribution to the construction of its first nuclear power plant in the southern city of Bushehr, where Moscow is now helping build two more reactors.

Putin made previous trips to Iran in November 2015 and in 2007. 

Leader Receives Putin, Aliyev

Supreme Leader Ayatollah Ali Khamenei told visiting Russian president that Tehran and Moscow must step up cooperation to isolate the United States and help stabilize the Middle East.

Iran and Russia are the main allies of Syrian President Bashar al-Assad, while the United States, Turkey and most Arab states support rebel groups fighting to overthrow him.

 “Our cooperation can isolate America ... The failure of US-backed terrorists in Syria cannot be denied but Americans continue their plots,” Ayatollah Khamenei told Putin.  

Rapprochement

The rapprochement between Iran and Russia is worrying for both Saudi Arabia, Tehran’s main rival for dominance in the Middle East, and the United States. Putin praised cooperation with Iran as “very productive”.

 “We are managing to coordinate our positions on the Syrian issue,” Putin said.

“We oppose any unilateral change in the multilateral nuclear deal,” he told Ayatollah Khamenei.

He further described Iran as a “strategic partner”, saying Moscow attaches high importance to boosting relations with its southern neighbor.

“Moscow sees no limit to development of cooperation with Tehran,” he said.

The Russian president said the nuclear deal has been a big step to promote global peace and stability, and attempts by any party to the two-year pact to undermine the outcome of years of painstaking negotiations are not acceptable.

“We believe it is by no means justifiable to unilaterally terminate the deal,” he said, adding that the agreement has nothing to do with Iran’s defense and missile programs.

Moscow is also an important ally for Iran in its renewed confrontation with the United States, where Trump broke ranks with major allies on Oct. 13 by decertifying Tehran’s nuclear deal with six world powers including Washington under his predecessor Barack Obama.

Trump has called the agreement “the worst deal ever negotiated” and branded Iran a “terrorist nation” for involvement in conflicts in the Middle East.

 

Subscribe to
IRAN INTERNATIONAL

CURRENT ISSUE
   
  January 2018
No. 86