New investment by a Russian energy firm is unlikely to be well received in the United States, which has been seeking to isolate Iran over its nuclear ambitions and has been urging foreign firms to cut business ties.
Gazprom said in a statement the deal was clinched on Tuesday at talks between its chief executive Alexei Miller and Iranian Energy Minister Gholamhossein Nozari. It did not give any figures for investment commitments.
“The two sides have agreed to jointly develop two or three blocks of South Pars as well as Gazprom Neft’s participation in oil production projects in Iran”, the statement said.
Gazprom is already involved in phases two and three of South Pars together with France’s Total and Malaysia’s Petronas.
Iranian officials could not be reached for immediate comment.
Russia has been reluctant to impose more U.N. sanctions on Iran although it has voiced some concerns about Tehran’s nuclear ambitions.
Russia is building Iran’s first nuclear power plant and has supplied the fuel it will use, despite U.S. concerns that Tehran is seeking to build atomic bombs. Iran denies any such intentions.
Iran holds the world’s second-largest gas reserves at 28 trillion cubic metres compared to 47 trillion in Russia, the world’s largest gas reserves holder.
Iran produces 100 billion cubic metres of gas a year, less than a fifth of Gazprom’s production of 550 bcm, but has ambitious plans to grow output further mainly due to larger output from South Pars, believed to be the world’s largest gas field.
The agreement takes place as Iran is calling on Russia to set up a OPEC-style gas cartel, an idea that has sent jitters among top customers and politicians in Europe.
Moscow says better coordination is needed between key gas producers and consumers but rebuffs the idea of a cartel which would influence prices. (Reporting by Dmitry Zhdannikov; additional reporting by Edmund Blair in Tehran; editing by Michael Stott)
