Russian Oil Company Stops Cooperation with Iran Due to Fear of US Sanctions

As the deadline for the re-imposition of US oil sanctions against the Islamic Republic of Iran approaches, informed sources have said that the state-owned "Zarubezhneft" of Russia is halting its cooperation on two projects in Iran due to fears of these sanctions. "Zarubezhneft" had signed a ten-year contract with Dana Energy, an Iranian company, to develop the Aban and Paydar-e-West fields. "Zarubezhneft" held 80% and Dana Energy 20% of the investment in this project. The goal of this contract was to achieve a maximum daily production of 48,000 barrels of oil and an additional cumulative production of about 67 million barrels over the next ten years. The capital costs of the Aban and Paydar-e-West field development project were estimated at $674 million. A source at the headquarters of "Zarubezhneft" in Moscow told Reuters that with the certainty and approach of US oil sanctions, the company decided to exit its projects in Iran. This source stated: "Zarubezhneft" is stopping all its projects in Iran due to the oil sanctions. Donald Trump, the President of the United States, announced in May of this year the US withdrawal from the nuclear agreement with Iran, known as the JCPOA, and ordered the reinstatement of sanctions against Iran. The US oil and financial sanctions against Iran are set to be reinstated on November 5, and US officials say the goal of this round of sanctions is to reduce Iran's oil exports to zero. The informed source at "Zarubezhneft" also mentioned that sanctions could affect the company's foreign revenues and could impact its cooperation in other international projects. "Zarubezhneft" has been investing in oil projects in Vietnam since 1980. Another informed source told Reuters that "Zarubezhneft" has no plans to continue work in Iran. "Lukoil", the second-largest oil company in Russia, was also one of the companies that announced in May of this year that it does not currently intend to pursue projects related to Iran due to fears of US sanctions.