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June 2017, No. 84


Trade & Business

 

Iran, Russia Ink 14 MOUs


Putin said in televised comments after meeting Rouhani that trade between the countries had “grown more than 70 percent” last year.


Iranian President Hassan Rouhani paid a two-day state visit to Moscow where he met with his Russian counterpart Vladimir Putin to discuss a range of bilateral and regional issues. The trip (March 27-28) took place during one of the most important periods in Iran-Russia relationship.

It was Rouhani’s first official visit to Moscow, and technically the first time the two leaders met within a purely bilateral framework. Although it was the ninth time Putin and Rouhani had met face to face, their previous meetings were held either on the sidelines of international events, such as the UN General Assembly meeting, or in the context of multilateral initiatives. The last time they met was on Aug. 8, 2016, when they joined their Azerbaijani counterpart Ilham Aliyev for a trilateral summit in Baku. Putin’s only visit to Tehran during the past 10 years took place on Nov. 23, 2015, for a summit of the Gas Exporting Countries Forum.

All in all, though the close relationship between Iran and Russia is not dependent on specific administrations being in power in either country, and has so far been on a rather stable path, the current state of affairs in both countries assigned a greater degree of importance to Rouhani’s visit to Moscow.

In a brief statement to the press before his departure to Moscow, Rouhani said Iran has offered a number of oil and gas fields to the Russian companies. He expressed hope that the development of Russian-Iranian cooperation in the energy sector will speed up.

The delegation accompanying Rouhani included First Vice-President Eshaq Jahangiri, adviser to Ayatollah Ali Khamenei on international issues Ali Akbar Velayati, the ministers of foreign affairs, oil, trade, information and communication technologies, as well as the governor of the Central Bank of Iran. 

Tehran, Moscow Ink 14 MOUs

Russia and Iran signed (March 28) a string of bilateral agreements in Moscow after a meeting between Putin and Rouhani, who have grown closer through their mutual support for Syrian President Bashar Assad. The agreements mostly focused on flourishing economic ties in the fields of energy and industry.

Putin said in televised comments after meeting Rouhani that trade between the countries had “grown more than 70 percent” last year. “This is truly a good result considering that it was achieved in unstable global conditions and amid persistent volatility on the commodity and currency markets,” Putin said.

A joint statement issued by the Kremlin said that “special attention” had been paid to cooperation in energy, with both sides pledging to continue efforts to stabilize the international market.

The joint statement covered a variety of issues including the Iran Nuclear Deal (also known as the Joint Comprehensive Plan of Action), unilateral sanctions, cyberattacks, the situation in Afghanistan, Iraq’s territorial integrity, global energy balance, etc. They also discussed joint development of large hydrocarbon fields, export credit extension to Iran, Bushehr Nuclear Power Plant (NPP), aircraft and helicopter sale to Iran, easing visa restrictions and Iran’s membership in Shanghai Cooperation Organization (SCO).

Russia and Iran emphasized the importance of international transit routes in bilateral and multilateral trade-economic cooperation and confirmed the intent to continue the practical steps to realize the North-South international transport corridor, read the statement. It stressed the importance of ramping up efforts to connecting Qazvin-Rasht-Astara railway line to this route [North-South] as soon as possible.

The high-ranking delegations of Iran and Russia signed 14 cooperation documents in various political, economic, judicial, legal, scientific and cultural fields in the presence of Rouhani and Putin.

National Iranian Oil Company (NIOC) and Russian top gas producer Gazprom signed a memorandum of understanding (MOU) on cooperation in the field of natural gas.

The parties expressed their willingness to cooperate to ensure peace, stability and security in the Caspian region, and develop shipping, transit and multimodal transportation, sustainable development, environmental protection, the conservation and management of water and biological resources, combating oil pollution, tourism and marine scientific research, etc.

In addition, the two presidents expressed their willingness to work together to expand their cooperation in the political, economic and other areas in the South Caucasus and Central Asia in order to strengthen peace and stability in these regions. 


The first block of Bushehr Nuclear Power Plant reached the design capacity and documents for construction of the second and the third blocks are being coordinated, Putin said.


Global Energy Balance

Russia and Iran also pledged to continue efforts to rein in oil production and stabilize markets, said the statement.

The Organization of the Petroleum Exporting Countries (OPEC) and other large oil producers, led by Russia, had agreed in December to cut their combined output by almost 1.8 million barrels per day (bpd) to reduce bloated oil inventories and support prices.

Iran, however, successfully argued that it should not limit production that was slowly starting to recover after the lifting of international sanctions in January last year.

“Russia and Iran will continue cooperation in this sphere (in oil output cuts) in order to stabilize the global energy market and ensure stable economic growth,” the statement said.

Russia has pledged to cut oil output by 300,000 bpd in the first half of the year.

On March 26, OPEC and non-OPEC oil ministers, including Russian Energy Minister Alexander Novak, discussed the implementation of the December deal but stopped short of recommending that cuts be extended into the second half of the year.

Earlier, Iranian Oil Minister Bijan Zangeneh told reporters in Moscow that a global deal is likely to be extended, but time was needed to discuss the subject thoroughly.

“It seems that most of the OPEC and non-OPEC (countries) are going to extend the agreement, but time is needed to evaluate the situation and to have face-to-face meetings and discussions with others,” Zangeneh said.

Asked whether Iran would be ready to cut its own output under the possible extension, Zangeneh said: “I think it is necessary that all members comply with their commitments.”

Iran’s oil production stands close to 3.8 million bpd, he said. 

Development of Large Hydrocarbon Fields

Russian companies have reached agreements on development of major hydrocarbon fields in Iran.

“We see good potential to broaden interaction in the oil and gas sector. Leading Russian companies reached a series of important agreements on development of large hydrocarbon fields in Iran,” the Russian leader said. 

Export Credits Extension

Russia informed Iran about completion of internal procedures for extension of two export credits to Iran.

“The Russian party informed Iran about completion of domestic government procedures required for entry into force of the agreement between the two governments on extension of a state export credit for Iran to finance construction of a thermal power plant and the agreement on provision of a state export credit for Iran to finance electrification of Garmsar-Inceburun railway segment, signed in Tehran on December 13, 2016,” the statement said.

Implementation of projects stipulated by these agreements will promote investment and trade-economic cooperation between Russia and Iran, the parties said.

Furthermore, Putin and Rouhani stressed “importance of more active interbank cooperation, including between central banks, and importance of using national currencies in mutual settlements.” 

Bushehr Nuclear Power Plant

The first block of Bushehr Nuclear Power Plant reached the design capacity and documents for construction of the second and the third blocks are being coordinated, Putin said. 

Russia is providing significant aid to Iran in the nuclear sphere, he noted. “Our interaction is implemented in strict compliance with the international law, IAEA requirements and subject to all provisions of the comprehensive action plan in respect of Iran’s nuclear program,” Putin added. 

SSJ-100 Aircraft and Helicopters Deliveries

Moscow and Tehran discussed an opportunity of supplying SSJ-100 aircraft and helicopters to Iran.

“Ways of expanding cooperation in machine-building and in the civil aviation sector were discussed during negotiations. Potential deliveries of modern medium-range Sukhoi SuperJet-100 aircraft to Iran and helicopters for national ambulance aviation are on the agenda,” Putin said. 

Inter-Regional Cooperation

Putin and Rouhani support the idea to hold a bilateral forum on inter-regional cooperation until the year ends.

“The parties pointed to a high level of cooperation between the regions of Russia and Iran and stated their intention to fully support this field of interaction,” the statement read. “Putin and Rouhani upheld the idea to arrange a Russian-Iranian forum on inter-regional cooperation either in Astrakhan or Sari before the end of 2017. Regional heads and representatives of the two countries’ business circles could attend the forum,” the statement added. 

Easing Visa Restrictions

Moscow and Tehran will consider further joint steps aimed at easing visa restrictions for certain categories of Russian and Iranian citizens.

“Putin and Rouhani welcome the signing of the Agreement on visa-free group tours that aims at boosting cultural and humanitarian cooperation between Russia and Iran as well as at creating conditions for boosting tourist exchange,” the statement adds. According to the document, “the presidents handed down instructions to consider further joint steps to remove administrative barriers hampering trips of certain categories of citizens.” 

SCO Membership

Russia supports Iran’s plans to join the Shanghai Cooperation Organization (SCO). “The Russia side confirmed its support for Iran’s membership bid in the Shanghai Cooperation Organization and spoke in favor of the swift consideration of this application,” the statement said.

According to the statement, the two presidents focused on the importance of strengthening Russian-Iranian cooperation not only within the SCO but also in other multilateral regional formats. Apart from that, with an aim of enhancing peace and stability in Central Asia and South Caucasus, Moscow and Tehran “confirmed their readiness to expand cooperation in these regions in the political, economic and other spheres and stressed their commitment to cooperation in multilateral formats involving other regional nations.”

The Shanghai Cooperation Organization (SCO) is a permanent regional association founded in Shanghai, China, on June 15, 2001 by six nations, namely Russia, China, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Its priority tasks include joint counteraction to terrorism and extremism; cooperation in education as well as in the energy, oil and gas, transport, communication and other spheres. In 2015, a decision was taken to grant full-fledged membership to India and Pakistan. Iran has been enjoying an observer nation status since 2005.

 

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  June 2017
No. 84