NIOC, Lukoil Sign Exploration Contract

NIOC, Lukoil Sign Exploration ContractNIOC, Lukoil Sign Exploration Contract

The National Iranian Oil Company and Russia's second-biggest oil producer, Lukoil, concluded an exploration agreement worth $6 million, the exploration manager at NIOC said on Sunday.

“As per the terms of the contract, the Russian company will cover all implementation costs of the project,” Hormoz Qalavand was quoted as saying by Mehr News Agency.

Elaborating on the details of the joint geological studies and geophysical exploration contract, the official noted that identifying hydrocarbon reserves and assessing subsurface geological structures in West Karoun and Abadan Plain top NIOC's list of priorities, which is why the exploration management department has been tasked to handle the key project.

Underscoring the fact that Russian Lukoil enjoys state-of-the-art knowhow in conducting such research, the official said, “NIOC scrutinized the plan proposed by the Russian giant and eventually gave its consent to sign the joint research contract.”

According to Qalavand, similar projects are being undertaken in cooperation with reputable Asian and European universities and companies. Interestingly, NIOC does not pay any of the costs as they are all covered by investors.

Lukoil’s cooperation with Iran was disrupted due to EU and US sanctions against Iran's nuclear energy program. The Russian oil major had to abandon its Anaran oil project in 2010.

The Anaran oil block, which was being jointly developed by Lukoil, has estimated crude reserves of 2 billion barrels. The Russian company suffered a $63 million loss when it abandoned the project. In 2013, Iran reimbursed Lukoil $60 million.

In April 2015, Lukoil announced plans to return to Iran as soon as sanctions over the country’s nuclear program were lifted.

Lukoil is also considering buying assets in Iran as well as in Mexico after 2016, putting into operation a number of huge projects in 2015-16. The company has already reopened its office in Tehran.