Russia's Zarubezhneft signs cooperation agreement for onshore oil field in Iran

Russia's Zarubezhneft and Iran's IDRO Oil Saturday signed a cooperation agreement to jointly bid for a $1 billion contract at the onshore Susangerd oilfield in southern Iran, the official IRNA news agency reported. The Susangerd oil field in the Khuzestan province is one of Iran's newest finds, which Tehran hopes will produce around 30,000 b/d in two development phases.

Based on the agreement, a joint working group will be set up and once a final agreement is reached between the two companies, negotiations can begin with state-owned National Iranian Oil Co. or NIOC for a contract.

IDRO Oil is a subsidiary of the state-run Iranian Development and Renovation Organization, a holding company under the Industry, Mine and Trade Ministry. It is one of 17 eligible contractors that have received the ministry's approval to be a lead partner in joint ventures with IOCs to work in Iran's energy sector.

Last May, IDRO signed a cooperation deal with NIOC for the study of three oil fields including Susangerd. In December, IDRO Oil inked a deal for Susangerd with Austrian consulting company HOT Engineering aimed at preparing the field's master development plan.

"In the recent months, IDRO Oil had negotiations with several [foreign] reputable companies [to attract foreign investment and choose a foreign partner]. The talks have led to the signing of this cooperation and participation agreement with Russia's Zarubezhneft," IDRO Oil managing director Nasrollah Zarei was quoted as saying. He predicted that the technical proposal would be ready by end February to submit to NIOC. The project would initially need $900 million, he said.

Another Iranian contractor, Pasargad Energy, has also studied Susangerd.

Iran's energy sector has been constrained for years by international sanctions over its disputed nuclear program.

The OPEC member has pinned much of its hope on further developing the West Karun region, near its western border with Iraq, where NIOC operates multibillion-barrel fields.