Ahead of Russian President Vladimir Putin’s visit to Iran on Tuesday, his second foreign trip since he invaded Ukraine in February, Russian Gazprom and the National Iranian Oil Company have inked a $40-billion agreement for the development of oil and gas fields.
Moscow and Tehran signed the $40-billion Memorandum of Understanding (MOU) just ahead of Putin’s arrival in the Iranian capital. The deal, in its preliminary form, will see Gazprom assist Iran’s state oil company in the development of both oil and gas fields and the construction of LNG project pipelines.
According to Iran’s PressTV, the deal includes a $10-billion project in Kish and North Pars gas fields in the Persian Gulf, along with the $15-billion project to boost pressure at South Pars, which is the largest gas field in the world, shared by Iran and Qatar.
Additionally, the deal will see Iran’s national oil company cooperate with Gazprom to complete LNG projects and construct export pipelines for gas.
Finally, the MoU paves the way for energy swap deals between the two countries.
The Iranian National Oil Company is calling the deal the “largest foreign investment commitment on record” in Iranian oil industry history, claiming that the Russian investment represents one-quarter of all oil sector investments in the country from now until 2025.
Also on Tuesday, Iran launched Iranian rial-Russian ruble trading in its foreign exchange market in a further effort to shore up ties with Moscow and to boost exports to Russia. The move comes as Russia steps up efforts to abandon the petrodollar due to sanctions.
In his second post-invasion international trip, Putin is meeting with Iranian President Ebrahim Raisi in Tehran on Tuesday, followed by meetings with Iranian Supreme Leader Ali Khamenei and Turkish President Recep Tayyip Erodgan. The meetings will discuss energy, the conflict in Syria, global grain exports and the conflict in Ukraine.