Iran withdraws from oil agreements with Ukraine, Russia firms

May 15, 2014

Iran's agreements with Russian and Ukrainian firms to develop four oil fields have been halted until further notice, Trend reported on May 13.

Abdolreza Haji-Hosseinnejad, an official with the National Iranian Oil Company, said on May 13 that the oil ministry has prioritized development of Iran's oilfields, Iran's Mehr News Agency reported. "Oil ministry's first priority is to develop the country's joint oil fields. Since Zagheh, Kouhmond, Boushkan and Kouhkaki oil fields are not joint fields, the oil ministry has decided to halt the projects for now," he explained.

He went on to note that the oil ministry has announced its decision to the other sides of the agreements as well. National Iranian Oil Company (NIOC) and Russia's Tatneft signed a deal, worth $700 million, in 2011 to develop the Zagheh heavy crude oilfield in southwest Iran.

The deal is aimed to produce 7,000 barrels per day (bpd) of heavy crude from the oilfield in the first phase and boost it to 55,000 bpd in the next phases, Mehr news agency reported.

The field has been left inactive for several years. Iran also signed a contract with a consortium consisting of Iranian and Ukrainian companies in 2012 for the development of Kouhmond, Boushkan and Kouhkaki oil fields. The contract, valued at about $800 million, was signed between the Petroleum Engineering and Development Company, an affiliate of the National Iranian Oil Company (NIOC), and Inter Naft Gas Prom Pars Co., which is a consortium of Iranian and Ukrainian entities, Press TV reported.

Copyright: Trend, 2014