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Iran signs $742 million oil deal with Russian company

Iranian minister expects boost in production of oil fields near Iraqi border to bring additional four billion dollars into state coffers

(From L-R) Segey Kudryashov, general director of Zaubezhneft, Iranian Oil Minister Bijan Namadar Zanganeh, Chairman of Iran's Energy Commission Fereydoun Hasanwand, Ali Kardor Managing Director of Iran's National Oil Company and Mohammad Iravani CEO and Chairman of Dana energy applaud after signing an oil field agreement in Tehran, on March 14, 2018. (AFP PHOTO / ATTA KENARE)
(From L-R) Segey Kudryashov, general director of Zaubezhneft, Iranian Oil Minister Bijan Namadar Zanganeh, Chairman of Iran's Energy Commission Fereydoun Hasanwand, Ali Kardor Managing Director of Iran's National Oil Company and Mohammad Iravani CEO and Chairman of Dana energy applaud after signing an oil field agreement in Tehran, on March 14, 2018. (AFP PHOTO / ATTA KENARE)

TEHRAN, Iran — Iran on Wednesday signed a $742 million (600 million euro) deal with Russian state-owned energy firm Zarubezhneft to boost production at two oil fields in the country’s west.

Zarubezhneft and Dana Energy, a private Iranian company, will jointly develop the Aban and Paydar fields in Ilam province near the Iraqi border, to boost production from 36,000 to 48,000 barrels of oil per day.

Zarubezhneft will put up 80 percent of the capital, while Dana Energy will cover the rest.

“Increasing the production from these two fields will bring some four billion dollars to Iran” over the coming years, Iran’s Oil Minister Bijan Namadar Zanganeh said at a signing ceremony in Tehran.

National Iranian Oil Company head Ali Kardor said it was the country’s first such deal with a Russian firm.

An oil technician in an oil field southwest of Tehran. (photo credit: AP/Vahid Salemi)
An oil technician in an oil field southwest of Tehran. (photo credit: AP/Vahid Salemi)

“On the political front, relations with Russia are at the highest level, but in the economic sphere they have not yet reached” the same level, he said.

Iran and Russia, both key allies of Syrian President Bashar al-Assad, have strengthened their relations in recent years.

Kardor said energy giant Russia had “great experience” in exploring and developing oil fields.

The deal comes amid heightened fears that Washington will withdraw from a historic 2015 deal to restrict Iran’s nuclear program in exchange for the easing of crippling sanctions.

That would further complicate the work of foreign companies wanting to work in Iran.

Wednesday’s was Tehran’s second deal with a foreign energy firm since the signing of the nuclear accord with world powers.

In July last year, a consortium headed by French energy behemoth Total defied pressure from Washington to sign a $4.8 billion agreement with Tehran.

That made it the first major western oil and gas company to return to the country since the lifting of international sanctions in January 2016.

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