Iran Oil Diplomacy Unyielding
Iran’s Ministry of Petroleum is experiencing busy schedules these days. Senior foreign officials are constantly traveling to Iran to meet with Iran’s petroleum minister, Bijan Zangeneh. After visits by German, Italian, British and South Korean officials, the Russians travelled to Tehran to review avenues of oil and gas cooperation between Tehran and Moscow. Moreover, top officials from Japan, Indonesia, Armenia and Afghanistan also met with Zangeneh in Tehran in the past month.
On October 21, Zangeneh met with Russian Energy Minister Alexander Novak. In this meeting, which was attended by representatives of major Russian oil and gas and transportation companies, the two sides discussed ways of enhancing cooperation level on energy issues.
In the meeting, Zangeneh highlighted Iran’s willingness for broadening relations with Russia, saying: “Given the commonalities between the two countries in holding huge oil and gas reserves and the possibility of exporting them to global markets, Tehran and Moscow can expand their ties in the energy sector.”
He referred to new contracts for the development of oil and gas fields as a topic of discussion with his Russian counterpart.
He said that Russian companies plan to attend the November conference in Tehran, in which Iran Petroleum Contract (IPC) will be unveiled.
Zangeneh said Russian companies have already sought information about IPC and Iran’s future plans for the development of oil and gas fields.
The Iranian minister said his negotiations with Novak also focused on providing services and supplying commodities in the petroleum industry, adding: “The Russian companies have been recommended to partner with qualified Iranian companies and register a company in Iran for conducting joint projects.”
Zangeneh said Iran has invited Russian companies to operate downstream projects like refining and petrochemical projects.
He also said that Iran and Russia discussed the possibility of oil and gas swap. “Both countries have good facilities in this field. Iran can receive gas, crude oil and petroleum products from Russia in the north and deliver them to Russia’s gas, crude oil and petroleum products customers in the south.”
Zangeneh said negotiations were also held on bilateral relations, cooperation between OPEC and non-OPEC countries and the Third Gas Summit of the Gas Exporting Countries Forum (GECF) due to be held in Tehran.
“The horizon of expanding cooperation between the two countries in the oil and gas sectors is very bright and we hope that we would be able to reach good agreements in these sectors,” he said.
Zangeneh said Russia is happy with the current level of oil prices and believes that no interference should be made with the market. “Novak believes that since Russia has had no surplus production to cause oversupply in the market and others have had overproduction; therefore, this group must make efforts to prop up the market,” said the Iranian minister.
Zangeneh said Russia believes that the market should be let free to go ahead in its natural state.
For his part, Novak referred to the history of Iran-Russia relations, saying: “During this trip, a large number of major Russian companies involved in the oil and gas, transportation and communications sectors are present.”
Noting that level of trade and economic cooperation between Iran and Russia will enhance, the Russian minister expressed hope that this meeting will contribute to broadening Iran-Russia relations.
Novak also said he discussed Iran-Russia cooperation in his meeting with Iran’s Minister of Communications and Information Technology Mahmoud Vaezi.
The Russian minister said an Iranian delegation is planned to visit Moscow in the near future to discuss the establishment of an Iran-Russia joint bank. He said Russia and Iran plan to undertake joint projects worth $35 to $40 billion.
Iran-Japan Upstream/Downstream Cooperation
Japanese Foreign Minister Fumio Kishida met with Zangeneh in Tehran on October 12.
Japanese companies were engaged in extensive energy cooperation with Iran before international sanctions were imposed. They are now willing to return to Iran’s petroleum industry after removal of sanctions.
After the meeting, Zangeneh said Iran and Japan can sign contracts for the implementation of the Joint Comprehensive Plan of Action (JCPOA), which is the official title of Iran’s historic nuclear deal with six world powers.
He said no tender bid would be needed if Japanese companies are willing to invest directly in Iran.
“Iran and Japan can cooperate in petrochemical, refining and distribution, and LNG sectors,” said Zangeneh.
The minister said Kishida is the second high-ranking Japanese official to visit Iran over recent months, adding that negotiations with Japanese companies continue for future contracts.
Zangeneh said the Japanese companies will have to create insurance coverage if they intend to expand their service activities in Iran.
“By relying on insurance coverage, the Japanese companies can finance the projects they are willing to operate in Iran,” he added.
Zangeneh said he expected Japan to return its oil purchase from Iran to the pre-sanctions level, adding: “The Japanese are also interested in Iran’s upstream and downstream oil sectors.”
He also said that Iran has asked Japanese companies to cooperate with Iran in energy efficiency and energy conservation projects. “Iran is ready to consider proposals of Japanese companies,” he said.
Kishida said Japanese companies are ready to broaden cooperation with Iran in different energy and economic sectors.
He said that the representatives of big Japanese companies accompanying him during his trip are willing to cooperate with Iran in different sectors of the petroleum industry.
Kishida said Japanese companies welcome a final agreement with Iran, adding that he discussed ways of broadening economic cooperation in his talks with Zangeneh.