Tehran and Riyadh have exchanged views regarding OPEC and OPEC+ policies to ensure stability in the world oil markets, Iran’s oil minister said.
“All decisions concerning global oil markets over the last few months have been made by pooling minds with OPEC's de facto leader and closer collaborations are on the agenda,” Javad Owji was also quoted as saying by the Oil Ministry’s news portal Shana.
Referring to the two country’s recent agreement to restore diplomatic ties after years, he noted that the National Iranian Oil Company has formulated proposals to develop joint oil and gas fields, namely the Arash offshore gas field in the Persian Gulf, with the help of neighboring states.
“We are willing to hold talks and cooperate to develop the joint field.”
Discovered in 1962 in the Persian Gulf, the Arash field’s gas reserves have been estimated at 28 billion cubic meters along with some 310 million barrels of oil.
Iran believes projects related to shared fields should be carried out jointly, which would strengthen economic ties among the countries concerned.
Some 23 Iranian hydrocarbon fields lie in border areas and are shared between Iran and adjacent countries, including Kuwait, Iraq, Qatar, Bahrain, the UAE, Saudi Arabia and Turkmenistan.
Most of Iran’s oil and gas fields lie on a belt running through its maritime boundary in the Persian Gulf and the foothills of Zagros Mountains – an extensively jagged zone that is geologically the result of the Arabian plate's collision with the central Iranian plateau.
Oil Exports
Iran's oil exports have reached their highest level since the reimposition of US sanctions in 2018 and NIOC has injected close to $14 billion into the secondary foreign exchange market, locally known as Nima, since March 2022, Owji said.
Nima is an online platform affiliated to the Central Bank of Iran where exporters sell their overseas foreign exchange revenues and companies buy them for importing machinery, equipment and raw materials.
The oil minister said an additional 83 million oil barrels were exported in the current fiscal year (started March 21, 2022) compared with the fiscal 2021-22.
This represents 190 million more barrels than those recorded in the past two years, according to Owji, who added that gas exports increased by 15% in the fiscal 2022-23 compared to the previous Iranian year.
According to the oil minister, Iran and Russia have signed oil and gas MoUs and deals worth $44 billion and executive operations will start soon. He did not elaborate.
Asked about natural gas swap deal with Turkmenistan, Owji said the agreement became operational last year.
“NIOC started to receive 5 million cubic meters of gas per day from Turkmenistan and deliver an equivalent amount to Azerbaijan at the Astara border under the trilateral agreement signed in Turkmenistan. Now the volume has reached 10 mcm/d,” he said.
Oil and gas swap can be an important source of revenue, as the northern neighbors with abundant hydrocarbon resources need access to the sea in the south.
Experts believe that the swap deal with Turkmenistan will encourage other countries in the region to sign similar deals and use Iran’s capacities in this regard.
Having the largest high-pressure gas pipeline network after Russia, Iran can play a key role in transferring gas from east to west of Iran and neighboring countries.
The Oil Ministry has announced that Iran is willing to start swapping oil and gas from Caspian Sea littoral states, provided Russia, Kazakhstan, and Uzbekistan cooperate with Iran in this regard.
Gas Exports
Regarding natural gas export, Owji said, “Iraq and Turkey are our first and second priorities, and we will do our best to retain these markets. We also have an agreement with Pakistan.”
According to Mehran Amir-Moeini, the deputy director for gas marketing and operations at the International Affairs Department of NIOC, Islamabad has long been providing NIGC with lame excuses in breach of the terms of a gas import contract it signed with Iran in 2009.
“Enough is enough and filing a formal complaint against Pakistan should be a priority. Tehran has asked Islamabad to carry out a segment of the IP gas pipeline project on its territory by February-March 2024, or pay a penalty of $18 billion,” he added.
The official noted that the decision is absolutely correct, as the neighbor has no intention of importing gas from Iran.
Talks are underway between Pakistan and Russia to extend a pipeline to replace the IP gas pipeline, meaning Islamabad has misused cordial relations with Iran to buy time not to be sued internationally.
“They are determined to violate the terms of the agreement. Hence, they must be sued and brought before ICA in less than a year, otherwise the National Iranian Gas Company will be deprived of its legal rights,” he said.
Iran and Pakistan signed an agreement in 2009 to lay a pipeline to deliver 22 million cubic meters per day of gas from the South Pars Gas Field in the Persian Gulf to Pakistan's Balochistan and Sindh provinces.
The pipeline's construction was to commence in 2012 and be completed in two years. However, Islamabad failed to show sufficient determination to complete the pipeline on its territory, blaming financial constraints.
According to reports, about 900 kilometers of the pipeline have been laid in Iran, but Pakistan has dithered over constructing 700 kilometers of the pipeline on its territory.
