Iraq’s Oil Minister Thamer al-Ghadhban is in Iran as part of a high-level two day trip led by Iraqi Prime Minister Adil Abdul-Mahdi. On Sunday, Ghadhban had a meeting with Iran’s Petroleum Minister Bijan Zangeneh and they reached an understanding regarding joint development of the Naft Shahr and Khorramshahr oil fields, according to Iran’s Ministry of Petroleum.
“Iran is ready to offer [its] capabilities to the Iraqi oil industry,” Zangeneh said, according to a statement from his ministry, noting there are “massive potentialities” to expand their cooperation in oil, gas, and refining.
Naft Shahr is located on the border between Iran’s Kermanshah province and Iraq’s Diyala, some 570 kilometres west of Tehran. Khorramshahr is located on Iran’s southern border with Basra province.
Iraq, emerging from years of conflict, is looking to rebuild its oil sector and infrastructure, something Iran can offer assistance with, said Zangeneh.
“Given the lack of development in the petrochemicals and gas industries in Iraq, there is a bright perspective for cooperation between the two countries,” he said.
During a visit to Iran’s Energy Industries Engineering and Design (EIED), the engineering branch of the Oil Industries' Engineering and Construction (OIEC) company, the two ministers decided OIEC will partner with an Iraqi company, the Iranian statement said.
Iraq’s energy sector is closely tied to Iran. Baghdad depends on electricity and natural gas imports from its neighbour to power its national grid. Iraqi officials have said it will be impossible to sever ties with Iran in order to comply with US sanctions. Iraq was granted a waiver by the US to continue its Iranian imports. That exemption was extended in mid-March for a second time, granting Iraq another three months before it has to comply with US sanctions on Iran’s oil sector.
The Iranian statement did not go into details of the understanding reached on Sunday, including the extent of their cooperation, funding, or a timeline. Iraq’s Oil Ministry has not immediately issued a statement.
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