Sanctions were dropped from Iran. It means the end of the Russian economy. And now Iran will promptly increase production, will enter the world market and will finally bring down the prices. And it will construct the gas pipeline to Europe and nobody will need Russian gas.

For certain you heard such forecasts. But we will imagine for a second that this time the habitual predictive apocalypse will pass our country too. What opportunities are opened before us by cooperation with Iran? Russia and Iran have long and difficult history of relationship. But let us start with a neighbor of Iran — Iraq. Two large Russian companies — Lukoil and Gazprom Neft work at its territory now. Earlier Lukoil conducted geological exploration in Iran (together with Norwegians) during which the field Azar on the block Anaran was revealed. But the Iranian projects were interrupted because the West undertook a sanctions bludgeon again.
Now Lukoil works in Iraq at two squares located near the city of Basra. These are the field Western Kurna-2 on which in 2014 industrial oil production started and also Blok-10 on which geological exploration is conducted. Gazprom Neft works at Badra’s field and also at three platforms in the Iraqi Kurdistan. Total production on the fields with Russian participation last year provided about 10% of all oil production in Iraq. Besides target level on Western Kurne-2 makes 1.2 million barrels per day. Approximately it is three times more than the indicators of 2015. For understanding it is more than 25% of last year’s levels of production of oil in the country.
Why is Iraq important when we speak about Iran? It would not be desirable to rise on thin ice of reflections about common interests which push Iraq to cooperation with Russia and Iran on settlement of the situation in the Middle East. But if policy is the concentrated economy, Russia has economic as well as political interests on the line of Turkey-Syria-Iraq-Iran. But there is also purely technical aspect. So, Badra’s field actually is only part of a large-scale deposit which, crossing border with Iran, turns in above-mentioned Azar. And the geological information collected in Iran helped with Badra’s development.
Gazprom Neft showed interest in Azar a few years ago. At that time it was not succeeded to agree with Iran. Perhaps, against current situation it will be possible to agree, if, certainly, those negotiations take place. It is important that in favor of Russia and its partners in the Iraqi projects (from Malaysia, Korea and Turkey) tells not only experience in the region, but also, so to say, a resistance to sanctions. And after all suspended position of Iran on the international scene in many respects predetermined last failures in joint contracts. Today we are in similar situation. It, probably, will help to understand each other.
But what is the difference who extracts the Iranian oil if the main problem is its entry into the world market. However let’s face severe reality: Iran is not the suicide — why should it bring volumes which will beat down the prices to market and will drop income of this country? Besides, now it is not possible physically to bring additional one million barrels per day to the market.
Removal of sanctions from Iran in the last two years became a transcendental object, trade in expectations. For one and a half years any mention of removal of sanctions from Iran pressed on the market of oil, beating down the price. It generates a number of questions to modern system of pricing but does not influence possible cooperation between our countries in oil production in any way.
If we speak about pipeline supply of the Iranian gas to Europe, there are not a lot of options. Iran already delivers gas to Turkey and theoretically could expand this route. If you take an interest in news, you came to know that supply of natural gas from Iran to Turkey just restored after explosion. Explosions on this route happen frequently — approximately one time in two years. Then Turkey should address to Russia that our country increased deliveries for compensation of former Iranian volumes. Whether it is worth explaining why adequacy of plans to stretch the gas pipeline from Iran through Iraq raises doubts? Rather Russia should compete with Iran in the market of China.
There is an opportunity to deliver natural gas in the liquefied form. And this option is quite good. Though here it is necessary to consider that the money for construction of plant on liquefied natural gas production should be spent in a proportion 1 million tons is $1 billion. There are also more expensive projects. Who will decide now to invest money in new production during the low prices of the liquefied natural gas? After all just about the streams from the USA and Australia will rush on the market! However, against super expensive liquefied natural gas production from these two countries the project in Iran does not look bad. After all cost of production of gas in this country is quite comfortable, geography also speaks well for the liquefied natural gas projects — large-scale deposits are close to the coast or are in the Persian Gulf (for example, South Pars).
The application for participation in liquefied natural gas projects in Iran was submitted several months ago by Gazprom. Benefit is obvious — potential sales markets are closer and to send the Russian gas there is more difficult. India is among such countries. Prices of oil and gas will grow. For now they are low and it is possible to manage to get more favorable conditions for participation in joint projects.
At the end we will remind that in the 1970s our country bought gas from Iran and then plans for construction of the gas pipeline were developed for export of the Iranian gas through the territory of the USSR to Europe. Most likely, at that time it was considered possible to involve westernized Iran in an orbit of the USSR through expansion of economic relations. In turn, the leaders of this Middle Eastern country played the option of a notorious multiple view that developed into revolt and a victory of Islamic revolution in 1979. By its results the West imposed sanctions on Iran and many business contacts with the USSR interrupted. But owing to the neighbor’s situation the relation between our countries were restored, as well as opportunities for expansion of economic relations.