News ID: 213455
Published: 0153 GMT April 18, 2018

Russia, Iran can extend oil supplies agreement for five years

Russia, Iran can extend oil supplies agreement for five years

Russian Energy Ministry is working with Iran on extending the agreement on oil supplies to Russia under the oil-for-goods program for five years, Minister Alexander Novak told reporters.

"The first supply has already been completed, the next ones are arranged. The agreement is effective; it has been extended. We generally believe that it should be renewed for five years and work on this matter," Novak was quoted as saying by TASS.

Earlier, it was reported that Iranian oil supplies under the program amount to five million tons per year. The first delivery was made in November 2017 and totaled one million tons.

In May 2017, Iran and Russia reached an agreement on oil supplies under the oil-for-goods program established in 2014, when the anti-Iranian sanctions were still in effect. The volume of the deal was agreed to stand at 100,000 barrels a day.

Earlier, Novak said that the oil-for-goods program was seen as a mechanism to boost trade between the two countries as proceeds from oil sales were meant to buy Russian-made commodity and services. According to Novak, Iranian oil would go for refining in those countries that buy such oil.

Iran and Russia agreed to 'strategic cooperation in the energy sector', ranging from development of Iran's oil and gas fields to collaboration on research during President Vladimir Putin's visit to Tehran last November.

At the time, the two sides signed six provisional agreements to collaborate on 'strategic' energy deals worth up to $30 billion.

Presidential aide Yuri Ushakov said earlier this month that Russian investment in developing Iran's oil and gas fields could total more than $50 billion.

Last month, Iran awarded its second post-sanctions oil contract to Zarubezhneft to re-develop Aban and West Paydar oil fields in the west of the country.

Iran's Oil Minister Bijan Namdar Zanganeh said the agreement was the first oilfield development deal awarded to a Russian company and also the first oil deal sealed through the new format of Iran's oil and gas contracts.

Novak has said more than 10 Iranian fields had been presented to Gazprom, Rosneft, Gazprom Neft, Zarubezhneft, Tatneft and Lukoil for development.

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