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Iran Signs $4 Billion Oil Deal With Russian Firm

Iranian Oil Minister Bijan Zanganeh
Iranian Oil Minister Bijan Zanganeh

Iran on March 14 signed a $742 million deal with Russian state-owned energy firm Zarubezhneft to boost production at two oil fields in the country's west.

Zarubezhneft and Dana Energy, a private Iranian company, will jointly develop the Aban and Paydar fields in Ilam province near the Iraqi border, to boost production from 36,000 to 48,000 barrels of oil per day.

Zarubezhneft will provide 80 percent of the financing for the project, while Dana will cover the rest.

"Increasing the production from these two fields will bring some $4 billion dollars to Iran" over the coming years, Iran's Oil Minister Bijan Namadar Zanganeh said at a signing ceremony in Tehran.

National Iranian Oil Company head Ali Kardor said it was the country's first such deal with a Russian firm.

"On the political front, relations with Russia are at the highest level, but in the economic sphere, they have not yet reached" the same level, he said.

Iran and Russia have strengthened their relations in recent years. Russian oil firms, hit by sanctions from the West over Moscow's aggression in Ukraine, have sought to garner business from Iran.

The deal comes as a U.S. threat to withdraw from Iran's 2015 nuclear agreement with world powers has prompted caution among Western oil firms seeking to do business with Iran.

The deal with Zarubezhneft was Tehran's second deal with a foreign energy firm since the accord was signed.

The first deal was clinched in July, when a consortium headed by France's Total defied pressure from Washington and signed a $4.8 billion agreement with Tehran.

The nuclear deal imposed curbs on Iran's nuclear activities in exchange for international sanctions relief. However, some U.S. sanctions remain on Iran, including those barring Tehran from using the U.S. dollar in business deals.

Based on reporting by AP and AFP