Iran and Azerbaijan are expected to finalize a number of energy agreements, including the joint development of oilfields in the Caspian Sea.
Oil Minister Javad Owji made the statement after meeting First Deputy Prime Minister of Azerbaijan Shahin Mustafaev in Tehran on Sunday, the Oil Ministry’s news portal Shana reported.
"We have reached some agreement whose details will be announced soon," Owji said, noting that preliminary talks were held concerning a gas contract with Azerbaijan, gas swap from neighboring countries with Azerbaijan, the deal to transfer gas to Nakhichevan and development of oilfields in the Caspian Sea.
Azerbaijan's Nakhichevan enclave, located between Armenia, Iran and Turkey, receives gas from Iran under a swap arrangement agreed to in 2004, with Baku supplying gas to the Iranian city of Astara.
"We hope this meeting results in the expansion of oil and gas collaboration and development of the two nations' hydrocarbon fields," Owji said.
The two crude producers have been developing oil and gas cooperation over the past decade. The two states signed a memorandum of understanding in 2018 for joint work on an oilfield located in the waters of Caspian Sea.
"To expand oil and gas reserves in the Caspian region, we need to reach out to international companies for funds, technology and partnership," he said.
Pointing to a preliminary agreement signed between SOCAR and the National Iranian Oil Company, the official said there is plenty of scope for cooperation in the energy sector between the two Caspian neighbors to help boost the two nation's economic development.
"We discussed a few new ventures and I believe that new documents will be signed in the near future as a result of these talks," Mustafaev said.
In 2011, Iran announced the discovery of 1.5 trillion cubic meters of gas in the Caspian Sea called Sardar-e-Jangal off Gilan Province, whose oil in place was estimated at 2 billion barrels.
Iranian oil officials have previously said the reservoir's development requires deepwater technology that needed by Iran.
Numerous disputes have hampered the development of oil and gas production and infrastructure projects in the Caspian Sea since the collapse of the Soviet Union in 1991.
Khazar Exploration and Production Company (KEPCO) – a subsidiary of NIOC – plans to give impetus to open investment talks with oil and gas majors if the US economic siege comes to an end.
Founded in 1998, KEPCO handles operations associated with oil and gas development and investment in the northern provinces of Mazandaran, Golestan and Gilan that straddle the Caspian coast.
Despite making significant headways in exploiting oil and gas resources in the south, energy development in Iran's northern regions have been unimpressive in the past several years.
Legal Framework
In 2018, the five littoral states of the Caspian Sea - Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan - signed a convention providing a legal framework for sharing access to the area and its resources.
Azerbaijan expects to increase gas production to some 47.5 billion cubic meters by 2025, the country's Deputy Energy Minister Kamal Abbasov said on Oct. 28.
Azerbaijan is keen to hike its gas production for both domestic use and future exports.
Last year, production totaled 37 bcm, Abbasov said during a webinar organized by the International Energy Forum.
Azerbaijan's output of crude oil fell 0.8% on the month to 587,000 bpd in October, data released on Nov. 4 by state-owned energy company Socar showed.
Meanwhile, Iran pumped 2.52 million bpd in October, according to the latest S&P Global Platts' OPEC+ survey. The OPEC member is exempt from quotas.
The Caspian region is one of the oldest oil-producing areas in the world and is an increasingly important source of global energy production. It holds an estimated 48 billion barrels of oil and more than 8 trillion cubic meters of natural gas in proven and probable reserves.
