to develop a major oilfield in southern Iran—but Tatneft promptly denied signing anything with Iran.
However, news photographs showed that an agreement of some kind was indeed signed by oil officials. Just what was signed remained unclear.
Many Iranian news outlets erroneously said a “contract” had been signed to develop the Zagheh oilfield on the Persian Gulf coast in Bushehr province.
The Oil Ministry’s website, however, said only a memorandum of understanding (MOU) was signed Sunday. It said a contract would be signed by Now Ruz.
As claimed by the Oil Ministry, Iran was on the verge of attracting a very major foreign investment, something it has been unable to achieve in a long time. The implication was that Russia was eager to help spike Western sanctions on Iran. The Islamic Republic often announces MOUs and other preliminary agreements with great fanfare. They do not always result in contracts.
And Tatneft publicly balked at what Iran said. Within 24 hours, it issued a statement totally denying what Iran had claimed.
“Tatneft Group have not entered in any agreements, contracts and have not accepted any undertakings relating to oil and gas projects in Iran,” it said in an English language statement. But the one-sentence statement did not say what the document it was photographed signing was all about.
Hours later, an Iranian oil official said the news reports of the denial were a mistake made by the media, ignoring the fact that the denial appears in English on the Tatneft website. Sadeq-Ali Nasseri, managing director of Iran Oil Kish Tatneft Co., which is partly owned by Tatneft, said the oil deal was not signed between Tatneft and Iran but between Iran Oil Kish Tatneft and the NIOC.
The signing was important enough that Oil Minister Rostam Qasemi showed up for the event.
Naji Sadouni, director of the state-owned Petroleum Engineering and Development Co. (PEDCO), who signed the MOU, said, “The oilfield will start production within 24 months and reach full production in 54 months.” He said the deal was worth $1 billion.
The Oil Ministry website said the field would produce 7,000 barrels a day at the end of the first phase and 55,000 barrels a day when development is completed.
The basis for these numbers remains unclear. The Mehr news agency said the Zagheh oilfield was abandoned several years ago after only a solitary well was drilled.
Tatneft is located in Tatarstan, a Muslim majority republic within the Russian Federation. Iran has long sought to do big business with Tatarstan. Tatneft’s biggest shareholder is the government of Tatarstan.
Rustam Minnikhanov, who is both the president of Tatarstan and the chairman of Tatneft, attended the signing of the mysterious document and was quoted by Shana, the Iranian Oil Ministry’s news website, as saying, “If Iran is keen, Tatarstan is ready to increase cooperation in the oil and gas sectors.”
State television said the contract yet to be signed would be Iran’s standard “buyback” contract, meaning the Russians would build the facilities in the field but not own them or the oil.
Meanwhile, as Iran boasted of some sort of deal with Tatneft, the Mehr news agency reported that the NIOC had broken off talks with a Polish firm to develop the Lavan gasfield in the Persian Gulf. Iran had been negotiating with Polskie Gornictwo Naftowe i Gazownictwo for almost four years without success.
Mehr said the Lavan project is valued at $1.9 billion. It said the development contract would now be awarded to Iranian companies, which it did not name.
