Iran and Oman have signed a memorandum of understanding to expand cooperation in downstream and upstream oil industry.
The MoU, which included building collaboration to develop oil and gas fields plus expanding petrochemical exports, was signed by Managing Director of the National Iranian Oil Company Mohsen Khojastehmehr and Salim al-Aufi, Oman’s minister of energy and minerals, the Oil Ministry’s news agency Shana reported.
It was signed during a meeting with the Omani oil delegation in Tehran on Saturday.
“Cooperation in the exploration and production of oil and gas, and investment in the oil, gas and petrochemical industries have been outlined in the agreement,” Khojastehmehr said, adding that the details of the MoU will be outlined soon.
Oil Minister Javad Owji and his Omani counterpart Mohammed bin Hamad al-Rumhi last May agreed to discuss bilateral in various energy sectors and agreed to form a committee to jointly develop the Hengam Oilfield that straddles the two countries’ sea border.
“As the first basis of my talks with Omani oil minister, it was agreed to form a joint technical committee to develop the next phases of the Hengam Oilfield in a seamless manner between Iran and Oman,” Owji said.
Tehran and Muscat had signed a memorandum of understanding to jointly develop the Hengam Oilfield in 2005, but the agreement did not materialize and Iran decided to develop the field independently in 2012.
The ministers also reached agreements on the export of technical and engineering services from Iran to Oman, as well as the trade of oil and petrochemical products.
Undersea Pipeline
Iran has also agreed to revive a long-stalled project to lay an undersea pipeline to carry gas to Oman.
The agreement to revive the project was reached during Owji’s trip to Oman last year.
In 2016, officials of state-owned National Iranian Gas Exports Company met with those of Oman's Oil Ministry and three international oil companies – Shell, Total and Korea Gas Corp – to explore the potential to pipe gas from Iran to Oman.
This followed a 2013 agreement by the two nations, valued at $60 billion, to develop a 15-year gas export plan via a seabed pipeline. The pipeline proposed at the time would have had the capacity to transport 28 mcm/d of Iranian natural gas to Oman.
Those plans were abandoned when the US withdrew from the Joint Comprehensive Plan of Action, the formal name of the Iran nuclear deal, in May 2018, reinstating sanctions against the Middle East nation.
However, under the administration of US President Joe Biden, the two sides have begun indirect talks in Vienna, Austria, with the aim of reinstating the deal, but the negotiations have currently stalled.
Based on negotiations between Tehran and Muscat, Iran will carry out the onshore section of the gas pipeline.
Plans call for extending the present pipeline infrastructure by nearly 200 kilometers to transfer gas from the port city of Asalouyeh in the Persian Gulf to Kuhmobarak, Hormozgan Province, in the Sea of Oman. From there, a subsea pipeline will be laid to Oman's Sohar Port.
The proposed pipeline would run from the giant South Pars Gas Field in Iran to Sohar in northern Oman, where an existing pipeline runs to Salalah near the Yemeni border.
The sultanate could import as much as 20 billion cubic meters a year of Iranian gas, or more than 50 mcm/d, to meet its demand.
The pipeline will circumvent the maritime boundary of the UAE because the Emiratis will not allow the pipeline to be laid in their territorial waters.
