Russia aims to dominate Middle East energy
Russian energy firms are expanding worldwide. With Rosneft having been particularly active — striking critical deals in spots like India and Egypt the last few months. And this week Rosneft and fellow Russian energy giants struck another round of huge acquisitions in a completely different part of the world. As Oil Price writes in an article "Russia Aims To Dominate Middle East Energy", the biggest of those deals came in Iran. Where oil companies including Rosneft and Gazprom visited this past week along with Russian president Vladimir Putin — and grabbed a massive chunk of Iran’s quickly-opening oil and gas sector.
Rosneft CEO Igor Sechin said that his company and other Russian firms signed six separate cooperation deals with Iran’s government. With total investment under these deals to come in at a staggering $30 billion. That reportedly includes direct development of Iranian oil and gas fields. Along with other initiatives such as research and development.
The massive size of the agreements is a very important data point for western oil and gas firms, which have been jockeying for a position in Iran’s high-potential petroleum sector.
Iranian officials said last week that several of those firms are in the running for four oil and gas fields expected to be awarded by the end of March 2018. But those authorities also said that Russian firms are squarely in the mix for these assets — naming Lukoil and Gazprom as strong contenders. This week’s massive investment commitment may tip the scales in favour of Russian bidders — potentially shutting the west out of this strategic destination.
And Russian companies aren’t stopping there, they are also cementing a hold on other countries in the Middle East. Two weeks ago in Iraq, Rosneft agreed to buy a controlling interest in Kurdistan’s biggest oil pipeline — paying a reported $1.8 billion for the asset. That now means Russia controls one of the most strategic pieces of energy infrastructure in the Middle East. Which — added to fields and pipelines in places like Iran — could give the nation a leg up in this part of the world, when it comes to both profits and politics. Watch for more deals coming from Russia’s oil giants, who appear to be on a massive acquisition spree. And for the results of Iran’s bid rounds early next year, to see if any Western firms can compete.