Iran, Russia and Turkey signed an agreement in Moscow on Tuesday for joint investment in oil and gas development projects. Iran's Ghadir investment company, Russia's Zarubezhneft oil and gas intermediary and Turkey's Unit International are partnering together to develop exploration and production operations inside and outside of Iran.
Iran’s Ghadir Exploration and Production Company will lead the consortium, although shares are equally distributed amongst all three firms. The National Iranian Oil Company (NIOC) is being tapped to help with the third phase of development of the Darkhoin, Sepehr, Jafir oilfields and the Kish gas field.
Russia’s state-controlled Zarubezhneft has been involved in oil and gas projects with major companies such as ExxonMobil from the US, France’s Total, and Norway’s Statoil in recent years. In July of last year, Zarubezhneft signed an agreement with Iran’s NIOC to survey the West Paydar and Aban oil fields in western Iran for possible increase of recovery.
Unit International S.A. has led energy and electricity production projects in Turkey, as well as in Iran and Europe. In March, South Korea’s SK Engineering & Construction signed an agreement with Unit International to build and operate five gas-fired power plants in Iran with $4.2 billion. The power stations are set to have a combined generation capacity of 5,000 megawatts, making them Iran's largest privately developed power plants.
Energy has been an important driver of Iran expanding its international ties. As the second-largest supplier of natural gas to Turkey, behind Russia, Iran’s western neighbor is a natural fit for collaboration. Iran also provide close to 40 percent of Turkey’s imports of crude oil.
Turkey imports nearly 60 percent of its natural gas from Russia. Along with Azerbaijan, Iran represents one of the few alternatives for Ankara’s dependency on Russia. A desire to diversify its energy supply has been a main reason for closer economic ties that have developed between Ankara and Tehran over the last decade.
According to figures provided by the Turkish Statistical Institute, or TurkStat, trade between Turkey and Iran in 2016 was just under $9.7 billion. According to media reports, trade totaled $2.562 billion during the first three months of 2017, representing an increase of 27.5 percent compared to same period last year.