Following a recent meeting of Russian Energy Minister Aleksandr Novak and Iranian Foreign Minister Ali Akbar Saleh, Tehran offered Russian companies another chance to develop a number of its domestic oil and gas fields. The Iranian Foreign Minister hailed the expansion of ties between Tehran and Moscow.
The Iranians are desperate to help their economy hit by western sanctions. Tehran is expected to hold fresh talks with world powers later this month.
In his State of the Union address, US President Barack Obama, who plans to visit the Middle East soon, told Tehran it’s time to end a standoff over the country’s nuclear programme. “The leaders of Iran must recognise that now is the time for a diplomatic solution, because a coalition stands united in demanding that they meet their obligations,” Obama said.
Fadel Gheit, a senior energy analyst at Oppenheimer in New York, told New Europe on 14 February “the Iranians should better change their attitude because the world is not going to allow them to go ahead with the nuclear -- already have the crazy child in North Korea so we don’t want another crazy man in the Middle East. The Middle East has enough problems on its own exploding from every part. The last thing we want a confrontation between the Iranians and the Israelis or the Americans.”
On 12 February, North Korea defied worldwide warnings by detonating what it called a miniaturised atomic bomb in its third nuclear test.
“I think the Iranians are trying to find a way out of the hole they dug themselves into and they try to save face at home, basically because the economic sanctions are hurting them pretty badly and they know at the end of the day people are hurting and they are not going to support the regime. A confrontation with the West is going to make the situation even worse,” Gheit said. “I just hope it comes to a peaceful ending in everybody’s interest. It’s a shame the Iranians did not really behave in such way to improve their economy and improve their standing in the whole world,” the Oppenheimer energy analyst said.
Tehran also said the priority is with Russia should Iran decide to construct a new nuclear power plant.
Iran is one of the world’s biggest oil and gas exporters and its economy is heavily dependent on energy revenues. In November 2009, Russian gas monopoly Gazprom and National Iranian Oil Company (NIOC) signed a memorandum of understanding to co-operate on the development of the Azar and Changuleh oil fields. However in August 2011, Iran decided to go back on the deal, operating the fields using local consortiums. Russian oil major LUKoil suffered a $63-million loss when it was forced to withdraw from a project in the Aran oilfield.
Gheit said that between Russia and China, Iran does not have a lot of friends around the world so the Iranians will probably honour the new deals. Nevertheless, Russia will obviously probably seek a lot of guarantees, he said. “Well, it goes without saying: ‘Fool me once, shame on you. Fool me twice, shame on me,’” Gheit said. “They’re not going to go through the same task and get fooled again.”
follow on twitter @energyinsider