TEHRAN- Iran and Russia inked a deal on Wednesday to develop Aban and Paydar-e Gharb oilfields in west of Iran, Shana news agency reported.

The deal, which is the second deal Iran signed based on the new model of its oil contracts (known as IPC), was inked between National Iranian Oil Company (NIOC) and a consortium comprising Russia’ Zarubezhneft Company and Iran’s Dana Energy Company.

NIOC Managing Director Ali Kardor, Zarubezhneft Director General Sergei Kudryashov, and Danan Energy Managing Director Mohammad Iravani signed the deal in Tehran in presence of Iranian Oil Minister Bijan Namdar Zanganeh.

The Russian company will have an 80-percent share in the project and Dana Energy’s share will be 20 percent. 

Aban and Paydar-e Gharb are both jointly owned by Iran and Iraq. Their combined oil output is currently 36,000 barrels per day, which according to the 10-year deal signed on Wednesday it is to reach 48,000 bpd. 

The cost of developing the fields is estimated at $674 million, with an additional $68 million in indirect costs.

“This is a very important point. This is the first time that we are signing a deal to develop oilfields with a prominent Russian company,” Reuters quoted Zanganeh as saying at the signing ceremony.

He added, “We hope that it won’t be the last deal. It was a difficult negotiation and I say congratulations to both parties.”

Zanganeh said Iran was currently in the middle of negotiations with other Russian energy companies including Gazprom.

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CAP: Zarubezhneft Director General Sergei Kudryashov (L), NIOC Managing Director Ali Kardor (C) and Danan Energy Managing Director Mohammad Iravani (R) signing a deal on development of two Iranian oilfields