BAKU, Azerbaijan, February 22. The 19th session of the Iran-Russia Joint Economic Commission (JEC) recently took place in Tehran, marking a significant step in bilateral cooperation. During the meeting, four memorandums of understanding (MoUs) were signed across diverse sectors, with officials pledging to accelerate efforts to transform these agreements into tangible projects in the near future, Trend reports.
Hydrocarbon Sector as a Top Priority
One of the main areas of cooperation is the development and utilization of Iran’s hydrocarbon reserves. Iran ranks second in the world with approximately 34 trillion cubic meters of gas reserves. Currently, 22 gas fields are active in the country, producing around 1.07 billion cubic meters of rich gas per day.
During the session on February 18, Iran’s Oil Minister Mohsen Paknejad emphasized the importance of strengthening Iran-Russia cooperation amid sensitive international conditions. He noted that moving the agreements reached within the JEC into practical implementation is a significant achievement.
Under the four contracts signed between Iranian and Russian companies, seven Iranian oil fields are being developed, and some are already producing crude oil.
Sanctions and Investment Challenges
Western sanctions and economic restrictions continue to hinder Iran from realizing the full potential of its oil and gas sector. Iran is working to create favorable mechanisms for foreign investors, with Russian companies currently taking a more active role. Seven Iranian oil fields are being operated by Russian firms, and one jointly held field with Persian Gulf countries is expected to begin development soon.
Currently, around 6% of Iran’s total crude oil production is managed by Russian companies, with plans to increase this share to 12%.
Gas Imports on the Agenda
Iran has stated that negotiations on gas imports from Russia are mostly finalized, with two main issues, price and payment mechanisms, still pending and expected to be resolved soon. On June 26, 2024, a document was signed between Majid Chegeni, the CEO of the National Iranian Gas Company, and Alexei Miller, Executive Director of the Russian Gazprom Company, on the transportation of Russian gas to Iran.
According to the document, if a final agreement is reached, the first phase will allow the import of 55 billion cubic meters of gas annually, with a potential additional 55 billion cubic meters in the next phase.
Iran plans these imports primarily to secure a stable supply to the northern regions, as the country’s main gas reserves are located in the south and in Gulf waters, creating significant technical losses during transport. In this context, Russian gas imports are considered a more economical and technically efficient alternative.