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development of a project to connect their energy systems, Ria Novosti reported on August 14.
The newly announced deal implies the joint development of a feasibility study for the “North-South Energy Channel” integrating the systems of the three countries.
The Russian companies party to the agreement are SO-UPS and Rosseti. On the part of Azerbaijan and Iran, AzerEnerji ASC and management company Tavanir will take part in the project, respectively.
Exchanges of electricity between Russia, Azerbaijan and Iran are already in operation, but for full integration of the countries’ power grids further work needs to be done.
At the same time, regional connections to the power networks of Georgia and Turkey are developing.
The agreement is seen as in tandem with the International North-South Transport Corridor (INSTC) multi-modal freight transport project.
Azerbaijan has increased its generation of electricity, therefore the energy corridor is seen as an opportunity to increase power resource exports, reducing economic reliance on shipments of gas and oil.
Iran and Russia need additional energy, thus the possible synchronisation of power grids and the transfer of excess energy from Azerbaijan to the neighbouring countries will have a positive effect both commercially and economically.
Iran suffers from spates of summertime power cuts. The corridor might help tackle that particular dilemma. On the other hand, during winter months when Iran needs less electricity, it might contribute power flows to the network.
9.2 Major corporate news 9.2.1 Oil & gas corporate news
South Pars oil layer to be developed by Iranian firm
With Tehran struggling to attract foreign operators, the National Iranian Oil Co. (NIOC) has announced that it will award the development contract for the South Pars oil layer to a domestic firm.
NIOC’s director of integrated planning, Karim Zobeidi, was quoted by Mehr News last week as saying that the selected company would proceed with the project under the integrated petroleum contract (IPC) model, which was introduced to replace the unpopular buyback contract in 2016.
He added that “Negotiations are also underway with domestic companies for the development of other fields such as Yaran and Sohrab.”
Zobeidi noted that IPC deals had been signed for projects to improve recovery from fields including Cheshmeh-Khosh, West and East Paydar, Sepehr and Jofair, adding that “with these contracts going operational the production capacity of the country’s oilfields will increase significantly.”
In January, Pars Oil and Gas Co. (POGC) managing director Mohammad Meshkinfam said that his company was in talks with several domestic oil and gas companies for the South Pars oil layer following the end of discussions with Denmark’s Maersk Oil.
Meshkinfam said at the time: “Since Maersk merged into Total, we stopped negotiations with the company due to the presence of Total on the Qatari side. At present, we are negotiating with some Iranian companies to develop the layers, with the negotiations being confidential,” he said.
He added that production from the oil layer had reached 25,000 barrels per day, following the initial rate of 5,000 bpd, which was reached on start-up in early 2017. Meshkinfam noted that neighbouring Qatar was producing 300,000
46 IRAN Country Report September 2019 www.intellinews.com