$1bn deal sealed

September 24, 2014 7:29 AM

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TEHRAN: Russia's Tatneft and Iran have signed a $1 billion preliminary deal to develop the Zagheh oilfield, state TV reported yesterday, deepening Moscow's business links with Iran despite US calls for further sanctions over Iran's nuclear programme.

The Zagheh oilfield, outside Deilam town in south Iran, contains an estimated three billion barrels of heavy crude oil.

Iran's state TV quoted Oil Minister Rostam Qasemi as saying yesterday that the field will produce 7,000 barrels per day of heavy crude in the first phase of its development within two years.

"The field has the capacity to increase its crude oil production to 55,000 barrels a day in the second phase within 54 months," Qasemi said.

The TV report said a final contract will be signed within three months on a "buyback" basis, meaning the Russians will build the facilities but will not own them, and will receive their costs plus a pre-agreed profit in return.

Source: gulf-daily-news.com

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