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Russia to Invest $4.5 Billion in Iran’s Oil Fields — Minister

By Nigar Bayramli November 2, 2022

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Iran and Russia signed four cooperation documents at the 16th meeting of the Joint Economic Commission with the aim of expanding the relations between the two countries, on November 1, 2022. / Shana.ir

Iran’s Oil Minister Javad Owji has said Russian investors have finalized a contract with Iran for developing seven oil and gas fields worth $4.5 billion.

“So far, Russian investors and companies have finalized a contract with Iran for developing seven oil and gas fields worth 4.5 billion dollars, and some projects have made 7-35 percent physical progress,” the minister, who was on a visit to Moscow, said on November 1, according to the Iranian energy website Shana.

Owji said that a downhole pump manufacturing plant would be built jointly in the southwestern city of Ahvaz by Russian and Iranian companies.

“As planned, this plant will manufacture 150 downhole pumps every year. With their special technology, these pumps can increase the production of oil wells by two to three times,” the Iranian minister added.

Referring to possible upcoming sanctions on Russia, the Iranian minister said that “Iran has been facing such sanctions for years, so it is a good opportunity to neutralize the sanctions with the help of two countries.”

Also, Owji, the Head of the Iranian delegation of the Joint Economic Commission of Iran and Russia, and Alexander Novak, the Deputy Prime Minister of Russia, signed four cooperation documents at the commission's 16th meeting with the aim of expanding the relations between the two countries.

The package of documents includes the strategic document for the development of bilateral relations, a loan agreement for the electrification of the Incheh Borun-Garmsar railway project, a bilateral memorandum for cooperation in the field of health, and a memorandum of understanding for the implementation of EPC projects for product transfer pipelines.

The joint economic commission’s meeting started in Moscow on October 30 and lasted till November 1. As part of the meeting, the two sides also discussed swap supplies of oil and gas.

"Swap deliveries of oil products have already started - we have agreed on broadening the range of the relevant products, that is also a future direction," Novak said.

He further said that the sides "reaffirmed the agreements on the speedy development of the necessary infrastructure for trade and economic relations."

"We are talking about the development of the North-South international transport corridor, the development of the ports of the Caspian and Mediterranean seas, the creation of joint logistics centers, and participation in the creation of the necessary infrastructure," Novak said.

Meanwhile, previously Novak said that Moscow and Tehran might reach an agreement on swap supplies of oil and gas by the end of 2022, adding that the first stage might imply the delivery of 5 million tonnes of oil and up to 10 billion cubic meters of gas.

Russia and Iran are stepping up trade and economic cooperation amid the pressure of sanctions on both countries. In January-July 2022, the bilateral trade increased by 44.9 percent in contrast to the same period in 2021, reaching $2.8 billion. In 2021, the Russian-Iranian trade increased by 81.4 percent as compared with 2020 - from $2.2 billion to $4 billion.