Satellite image of Caspian Sea. FILE PHOTO

Moscow, Tehran Deny Claim Of Deal To Block Iran Extracting Caspian Gas

11/4/2021

Russia’s Tehran embassy denied Wednesday there was any agreement between Iran and Russia to block Iranian gas extraction in the Caspian Sea as long as Iran’s demand for gas remains lower than its output.

A tweet from the embassy said that the claim, made by Adeshir Dadras, chairman of Iran’s Compressed Natural Gas syndicate, was untrue and that the embassy was authorized to declare it “a deliberate provocation aimed at undermining friendly Russian-Iranian relations.”

Dadras’ assertion, made in an interview with the Iranian Labour News Agency (ILNA) Monday, was also rejected Tuesday by Kazem Jalali, Iran’s ambassador in Moscow, who referred to rumors being spread by those trying to undermine Tehran’s relations with Moscow. It was refuted too by the main developer of the Chalos natural gas structure in the Caspian, Iran’s Khazar Exploration and Production Company (Kepco).

In June when announcing that development of Chaloushad been approved, Emad Hosseini, Kepco chairman, said the field held 30 percent of developable natural gas reserves of all Caspian Sea littoral countries and could, following $19 billion in investment and the lifting of United States sanctions, meet at least 20 percent of Europe's natural gas needs.

The claim gave rise to much criticism of relations with Russia from Iranian social media users who accused the government of political and economic concessions to Russia.

In August, an article by Simon Watkins for OilPrice.com, an energy news website, claimed that the size, price, and destination of this gas would be coordinated with Russia to boost "the energy power that Moscow has over Europe."

Watkins claimed Iran had agreed to “de facto control over where and at what price the vast majority of Iran’s gas is sold" as part of discussions over a 20-year cooperation agreement with Russia, similar to the 25-year pact signed with China in March.

The agreement, Watkins suggested, would enable Russia to head off any potential challenge to its own place in the European market – and presumably keep up gas prices to both Russia’s and Iran’s benefit – posed by a new supply of Iranian gas once US sanctions ended.

"Controlling this potential threat to its own dominance over gas supplies into Europe – and the considerable geopolitical power over the continent that comes with this – has been a major concern of Moscow’s for many years," Watkins wrote.

With 17.9 percent, Iran has the second-largest global gas reserves after Russia, which holds 18.1 percent. According to OilPrice, the wider Caspian basin area, including onshore and offshore fields, is conservatively estimated to have in proven and probable reserves around 48 billion barrels of oil, around 3 percent of world reserves, and 292 trillion cubic feet of natural gas, around 4 percent of the global total.

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