Recently, the National Iranian Oil Company (NIOC) signed a memorandum of understanding with Russia's Gazprom in six areas, including: investment in the development of oil and gas fields, investment to complete the half-finished Iran LNG project, definition of new floating LNG (FLNG) and small-scale LNG projects (MiniLNG), gas swap, oil product swap, construction of high-pressure export lines, oil and gas technology transfer. The total value of these memorandums is about $40 billion. This amount of capital can solve a large part of the capital needs of the oil industry, although the signing of the executive agreement for these memorandums is necessary for their implementation and the entry of the intended capital into the oil industry. However, in a situation where Western sanctions do not allow capital to enter the country and considering the issues that Russia has faced due to the war with Ukraine, Iran is expected to be able to make the most of the opportunity. However, some are concerned about such a connection with the Russians. The history of the presence of Russians in Iran, the prerequisites that are necessary to adhere to the contracts, the issue of gas competition between Iran and Russia and some other issues are raised as concerns of some experts.

Accordingly, we (Shana) sat down with Hamid Hosseini, the chairman of the board of directors of the Oil, Gas and Petrochemical Products Exporters' Union and an expert in the field of energy, to get his opinion about these concerns.

Shana: What is your assessment of the memorandum of understanding between the National Iranian Oil Company and Gazprom? Is it right to worry about the past experiences of cooperation with the Russians?

Maybe in the past due to the gas competition between the two countries, there was no serious cooperation between Iran and Russia, but in these years when we were in this competition, the US became the largest exporter of LNG in the world, and now the Russians have come to the conclusion that the consumption of gas in the world will increase and the tendency towards consumption of LNG has increased and they alone are not able to meet the world's demand, so there is no room left for gas competition.

Also, before the victory of the 1979 revolution in Iran, the Russians cooperated with Iran and imported Iranian gas and exported it to the world because at that time their gas production was low and Iran was not considered a competitor for them. Now, according to these conditions, the two countries can have gas relations to ensure the interests of the parties.

As for whether the Russians will break their promise, I think the answer is no. First, the political geography of the world has changed and the situation of Iran is different from the past. Second, in recent years, the Russians have adhered to the contracts they have signed with Iran in the field of oil and gas, including Zarubezhneft’s contract with Dana Energy for the development of the Aban and Paydar fields, which is to increase the recovery and production rate, and they have performed well. The template of the new model of oil contracts also has a contract for the Cheshmehkhosh, Dalperi and East Paydar fields, which is being worked on, so we cannot completely deny and say that the Russians will not fulfill their promises. We can hope that these memorandums will lead to a contract.

Shana: If this memorandum is to be converted into a contract, what considerations should be taken into account and what are its principles?

In my opinion, in order for the contracts to be finalized and signed, we should not sign large-scale contracts of $30 and 40 billion; we should write small and case-by-case contracts and speed up and finalize the negotiations. We should not sign a big contract that includes several projects and prolong the negotiations, otherwise Europe and Russia will finally reach a truce and understanding, and this will affect the fate of the agreements.

Shana: In your opinion, interaction with the Russians can lead to the revival of the regional energy transit hub issue?

It is definitely possible for us to become an energy pole in cooperation with the Russians. Iran can import a part of Russian gas through the Turkmenistan pipeline. This gas can be consumed in Iran, or swapped and transited to neighboring countries. In the field of electricity, the same thing is possible due to the time difference and the difference of peak time consumption. In the field of products, considering that Europe is seriously following the issue of sanctions against Russia until the end of this year, and this country exports 2.5 million barrels of petroleum products per day, it will undoubtedly face export challenges, so access to the markets will be difficult and it is forced to export at a low price. This is an opportunity for Iran and we can undoubtedly use the Caspian Sea for this purpose and many refineries in the Volga region; Tatarstan and Chechnya can send their oil products to Iran. Such cooperation can be pursued even in the field of petrochemicals.

Shana: As you know, Iran and Russia are also known as competitors in oil and gas, what is their cooperation capacity and how can they influence the world energy market?

It is true that we compete with Russia in gas and oil, but according to the difference of the markets and the fact that new competitors are replacing us and the Russians, it is in the national interest of the two countries to cooperate with each other. Finally, a political bloc is forming in the world, in which the interests of Iran are definitely closer to Russia than to the US. On the other hand, the United States has become the largest gas producer and the largest exporter of LNG, and it will definitely supply Europe with a part of its gas demand. Accordingly, the winner of the Russia-Ukraine war is the United States and it will capture the European market, so if Iran and Russia can reduce the influence of the United States in the oil, gas and product markets by working together, it will benefit both countries.

Shana: How much of this memorandum do you expect to result in signing of a contract?

How much of this memorandum is operational depends on the circumstances. In my opinion, the Russians have the necessary financial and technical capabilities, and on the other hand, we desperately need this capability, so it is possible that many of these projects will be implemented, and we should not be disappointed.

Shana: According to your meetings about the product swap with the Russians, do you think we will reach a conclusion with the Russians and what is the target volume for the product swap?

How much we can swap and transit oil products with the Russians depends on how much the Russians deliver to Iran from this region. We do not have correct information about the refineries in the region, their transportation facilities and their port facilities. Unfortunately, we have never had oil cooperation with the Russians from the Astrakhan port, and if this contract is realized, it will be the first time that we can witness the arrival of Russian oil products to the northern ports of Iran. Only then we can decisively comment on this issue.