Iran and Iraq will work together to develop two oilfields

According to a report on Iran’s oil ministry website, Oil Minister Bijan Zanganeh Iran and Iraq have come to an understanding regarding development of the Naft Shahr and Khorramshahr oilfields, though without details of the plan.

Iranian President Hassan Rouhani called for Iran and Iraq to expand their gas, electricity, and oil dealings and boost bilateral trade to USD $20 billion despite difficulties caused by U.S. sanctions against Tehran. Iranian media reports have put the current level of trade at about $12 billion. In remarks carried by state television, President Rouhani said, “We hope that our plans to expand trade volume to $20 billion will be realized within the next few months or years,” after a meeting with visiting Iraqi Prime Minister Adel Abdul Mahdi.

In November, American President Donald Trump re-imposed sanctions on Iran’s energy exports citing its nuclear program and meddling in the Middle East, but he granted waivers to several buyers to meet consumer energy needs. In March, the United States granted Iraq a 90-day waiver exempting it from sanctions on buying energy from Iran.

According to comments published by the oil ministry’s news site SHANA in February, Minister Zanganeh criticized Iraq for not agreeing to develop shared oilfields because of sanctions fears. The energy industries in the two countries have close ties, and Iraq relies heavily on Iranian gas to feed its power stations. Iraq imports roughly 1.5 billion standard cubic feet of gas per day from Iran via pipelines in the south and east of the country. Zanganeh noted Iraq owes Iran approximately $1 billion for gas supplied in the past.

After a trip to Iraq last month by President Rouhani and Minister Zanganeh, Iran had agreed to help Iraq with technical and engineering services in the oil sector. “Given the lack of development in the petrochemicals and gas industries in Iraq, there is a bright perspective for cooperation between the two countries,” Minister Zanganeh said, also without further detail.

According to SHANA, Iran’s deputy oil minister for trade and international affairs Amir Hossein Zamaninia said Iran also agreed to help with the development of mutual fields, rebuilding old refineries, and helping build a network for gas delivery.