Dec.19 - Iran has signed a deal reportedly worth up $1bln with Russia's Tatneft to develop an oil field, a rare example of new foreign investment in a country under tight economic sanctions. Sonia Legg reports
Iran has signed a deal reportedly worth up to one billion U.S. dollars with Russia's Tatneft to develop an oil field, a rare example of new foreign investment in a country under tight economic sanctions. For a country under tight economic sanctions this was a big deal. Iran has signed an agreement with Russia's Tatneft to develop the Zagheh oil field on the gulf coast of Bushehr province. Iran's oil ministry says it hopes to produce 7,000 barrels a day in the first phase of the project, increasing significantly once phase two begins. Rostam Qasemi is the country's oil minister. (SOUNDBITE) (Farsi) IRAN'S OIL MINISTER ROSTAM QASEMI, SAYING: "The deal will mean at least 50,000 barrels of heavy oil can be extracted per day. Fortunately the preliminary well has already been dug, so production can start." Qasemi said the value of the contract would be revealed after two months when the technical details were finalised. But reports suggest it could be as much as one billion dollars. The President of the southern republic of Tartarstan, where Tafneft is based, was in Tehran for the signing. He said he hoped for further economic co-operation with Iran, despite international sanctions over its nuclear programe. Russia has criticised the sanctions but despite this deal there are few signs that Russian investors are rushing in to replace western ones. Sonia Legg, Reuters.