Iran Touts Russia's Plan to Invest in Its Oil With Sanctions Looming

(Bloomberg) -- Iran said Russia is ready to invest as much as $50 billion in its oil industry even as Western majors are pulling out of deals with the republic amid the threat of U.S. sanctions.

President Vladimir Putin has confirmed the spending plan, with at least three deals worth some $15 billion already on the table, Ali Akbar Velayati, foreign policy adviser to Iran’s supreme leader, said in Moscow Friday. Russia is ready to invest in crude exploration and production, as well as refining, he said.

Iranian news agencies published similar comments from Velayati on Thursday, following his meeting then with President Putin in the Russian capital. Russian companies that have been in talks with Iran on joint hydrocarbon projects wouldn’t comment on the outcome when contacted by Bloomberg. Kremlin spokesman Dmitry Peskov also declined to comment on Velayati’s statements.

The pressure on Iran is mounting as U.S. President Donald Trump’s decision to withdraw from a 2015 deal that lifted most sanctions on Iran is forcing a number of international companies to reconsider ties with the Islamic republic, putting in jeopardy its giant oil and natural gas projects.

Iran has been in talks on investments with Russian energy companies including Rosneft PJSC, Gazprom PJSC, Gazprom Neft PJSC, Lukoil PJSC, Tatneft PJSC and Zarubezhneft JSC.

In March, two months before Trump announced his plan to renew sanctions against Iran, Russia expected three deals with Tehran by the end of that month. One deal, valued by Iran at some $4 billion, was signed with state-owned Zarubezhneft on a joint project to boost production at two brownfield sites. Other companies have said they are still assessing the situation and examining all possible risks.

Russia is still interested in proceeding with a so-called oil-for-goods program, under which Moscow would help Iran sell its oil. In return, half of Iran’s oil revenue would be spent on Russian goods, Energy Minister Alexander Novak said Friday.

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