On 1 November 2017, Tehran hosted the second round of a trilateral summit among Iran, Russia and Azerbaijan, with the participation of the Iranian President Hassan Rouhani and his counterparts, Vladimir Putin and Ilham Aliyev. Talks focused on the enhancement of cross-border interconnectivity, in line with the vision for an International North-South Transport Corridor (INSTC). Topics such as the situation in Syria, in the aftermath of the latest round of peace negotiations in Astana (October 29-30), Iran’s nuclear program and the legal status of the Caspian Sea were also on the agenda.
In parallel, the three leaders agreed to step up cooperation in the areas of hydrocarbon production and petrochemicals, including collective exploration and development of oil and natural gas fields, transportation and swap supplies of crude oil and petroleum products, as well as the deepening of interaction in the global energy market. Furthermore, the parties assessed progress towards the planned integration of their electric grids. It shall be reminded that trilateral deliberations commenced in the summer of 2016, in Baku, where a declaration introducing interstate cooperation in the energy sector, among other spheres of common interest, had been adopted by the three states.
In the margins of the presidential meeting, Russian state-owned oil firm Rosneft and the National Iranian Oil Company (NIOC) signed a roadmap for the implementation of joint oil and gas extraction projects, worth up to $30bn and estimated to produce some 55MT of oil per annum. Rosneft is said to have expressed interest in the development of 4 Iranian oil fields (Azadegan, Yaran, Marun and Kupal), even though the company’s CEO, Igor Sechin, didn’t elaborate on specific oil field investments.
Gazprom, in its turn, came to agreement with Iran’s Oil Ministry regarding the expansion of strategic energy collaboration and subsequently signed a Memorandum of Understanding with NIOC, allowing the two firms to proceed to the feasibility study stage for the design, construction and exploitation of the proposed Iran-Pakistan-India (IPI) gas pipeline, also dubbed the ‘’peace pipeline’’, whose completion has repeatedly been hindered due to troubled regional relations and security reasons, unsteady flows of financing, US opposition to the project and persisting disagreements among the involved countries relating to the preferred gas pricing formula. The idea refers to a 2.775km pipeline extending from Iran’s South Pars gas field in the Persian Gulf through the Pakistani city of Khuzdar, with one branch going on to Karachi and a second branch to Multan and then on to India. Gazprom’s support of IPI, i.e. of an eastward route for Iranian gas exports, comes amid Iran’s publicly enunciated willingness to add its gas to the Southern Gas Corridor through the Trans Anatolian Pipeline.
The latest attempt of Russian energy companies to make significant inroads into the Iranian market, read together with China’s and India’s intentions to engage with Iran on the realization of projects like the OBOR initiative and the development of Chabahar port, is yet another sign that the regional competitors for partnership with Tehran will strive to take advantage of the recently strained US-Iranian dialogue over the former’s objection to the 2015 nuclear deal.
As for the Azerbaijani-Iranian energy cooperation, SOCAR and Khazar Exploration and Production Company (a subdivision of NIOC) delegations have since late September, during a meeting in Baku, started examining prospects for exchange of technologies in the oil and gas industry, as well as for joint analysis of seismic data for the purposes of deep underwater hydrocarbon resources exploration in the Caspian Sea.
Available online at: http://www.caspianpolicy.org/energy/caspian-energy-insight-november-8-2017/#4
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