Russian Gazprom and the National Iranian Oil Company have signed a $40 billion agreement for the development of oil and gas fields in advance of Russian President Vladimir Putin’s visit to Iran on Tuesday, which will be his second international trip since the start of the war with Ukraine in February.
The $40 billion Memorandum of Understanding (MOU) was signed by Moscow and Tehran just before President Putin arrived in the Iranian capital. According to the preliminary terms of the agreement, Gazprom would help Iran’s state oil company develop gas and oil fields and build pipelines for LNG projects.
According to Iran’s PressTV, the agreement includes a $15 billion project to increase pressure at South Pars, the largest gas field in the world shared by Iran and Qatar, as well as a $10 billion project in the Persian Gulf’s Kish and North Pars gas fields.
Per the agreement, the national oil company of Iran would work with Gazprom to finish LNG projects and build gas export pipes. Additionally, it opens the door for energy exchange agreements between the two nations.
According to the Iranian National Oil Company, the Russian investment represents one-fourth of all investments in the country’s oil sector from now through 2025, making it the “biggest foreign investment commitment on record” in Iranian oil industry history.
Additionally on Tuesday, Iran opened its foreign currency market to trading between the Iranian rial and the Russian ruble in an effort to strengthen its connections with Moscow and increase exports to Russia.
As a result of sanctions, Russia is stepping up attempts to exit the petrodollar.