Iran, Russia's Tatneft Sign $1 Billion Preliminary Oil Deal
Representatives of Tatneft and the National Iranian Oil Company sign a $1 billion contract on the extraction of heavy oil at the Zagheh oil field in south Iran on December 18.
December 18, 2011
Iranian state TV has reported that Russia's Tatneft and the Iranian government have signed a $1 billion preliminary deal to develop the Zagheh oil field.
The report says the deal was signed on December 18 in a move that deepens Moscow's business links with Iran, despite U.S. calls for further sanctions over Iran's nuclear program.
The Zagheh oil field, located on the shores of the Persian Gulf in Iran's south, contains an estimated 3 billion barrels of heavy crude oil.
Iran's state TV quoted Oil Minister Rostam Qasemi as saying that the field will produce 55,000 barrels a day within five years.
The TV report said a final contract will be signed within three months on a "buyback" basis, meaning the Russians will build the facilities but will not own them, and will receive their costs plus a pre-agreed profit in return.
Russia has rejected U.S. demands for new sanctions against Iran over its nuclear program, arguing for diplomatic solutions to the standoff over whether it is developing atomic weapons.
compiled from agency reports