Russia favours Iranian route for crude exports

An interview with Russian ambassador to Tehran Alexander Maryasov.

Question: Iranian deputy foreign minister suggested Caspian-Persian Gulf route in Kazakh capital in 2000 and it was recently launched. Under the CROS project inaugurated in the Caspian port of Neka, Iran will take crude from Russia, Kazakhstan and Turkmenistan and pump it to its refineries in the cities of Teheran and Tabriz. In return, Iran will sell its own oil from Persian Gulf ports on behalf of the Caspian producers.
CROS already has a capacity to handle 170,000 bpd, which will climb to a peak capacity of 500,000 bpd. No exact timeframe was given for reaching full capacity. This project will cost much more lowly for Russia than the pipeline from Baku in Azerbaijan, through Georgia, to the Turkish Mediterranean port of Ceyhan. To what extent is Russia willing to get engaged in CROS?

Answer: Russia attaches special importance to this project. Under the deal, Caspian region crude producers deliver oil to one of Iran's northern ports, and pick up equal amounts of Iranian crude from a port on the Persian Gulf.
A pipeline between Neka and Tehran transports the Caspian oil to the refinery in the capital. It is very interesting for us.

Question: The Baku-Tbilisi-Ceyhan (BTC) oil pipeline, a project to export crude from the landlocked Caspian Sea, develops technical problems. The BTC pipeline, due to start operating in the first quarter of next year, will pump up to 1 mm bpd of oil from near Azerbaijan's capital Baku, through Georgia and Turkey, to the Mediterranean port of Ceyhan. It is being built by a consortium of oil majors, led by BP, at a cost of around $ 3 bn.
More than half of the work has already been completed and the BTC consortium says the pipeline is on schedule. How do you make assessment of Tehran-Moscow cooperation in supporting CROS?

Answer: I think that Iran and Russia are cooperating at a good level in this respect. President Mohammad Khatami and Oil Minister Bijan Namdar Zanganeh noted that Iran was the best route for oil and gas exports from the Caspian Sea to the Persian Gulf. We try our best to contribute to this project.
As you known, Russian giant LUKoil delivers its crude to Iran. We think that Iran-Russia cooperation will benefit all Caspian littoral states and boost the situation in the region.

Question: The United States throws weight behind BTC oil pipeline. Do you think that this route can be as efficient as CROS?

Answer: We always prefer more economical route. Given the geographical position of the littoral states, more routes can be of help. However, Russia supports the projects, which are based on economical and not political considerations.

Question: The Russian Federation took shape in 1991 when the Union of Soviet Socialist Republics collapsed. The 1921 and 1940 agreements Iran and ex-USSR had signed necessitated common sovereignty on the Caspian Sea. Do you think that the Caspian Sea can be carved up in a way that all littoral states supervise the seabed commonly?

Answer: We hope that our talks would pay off. A number of working groups has been formed to review this issue. We need the help of experts to settle the dispute.

Question: How long will the talks take?

Answer: This is a very complicated issue. The special geographical conditions in the Caspian Sea have made it difficult to define a legal status for the land-locked sea. We need time and we hope that our talks will conclude in the shortest possible time.

Question: Russia has decided to boost its oil exports. According to figures, Russia exported 43.24 mm tons of crude to the countries other than the Commonwealth of Independent States (CIS) in the first quarter of 2004 -- 23 % higher than 2003. Transneft has announced that it will export 240 mm tons of crude this year.
As you know the Organization of Petroleum Exporting Countries (OPEC) accounts for 35 % of the world energy needs. Other countries like Russia, Norway, Mexico and Anglo supply the rest. Non-OPEC oil producers sway the oil prices. IsRussia willing to cooperate with OPEC?

Answer: Russia does not give any assurances to join the OPEC but it coordinates its oil activities with the cartel. Russia maintains good cooperation with OPEC thanks to parallel interests. It is not necessary for Russia to join OPEC but the possibility of such event is not ruled out.

Question: Iranian Ambassador to Moscow Gholam-Reza Shafei said recently that Iran and Russia can construct the biggest route for gas exports to Europe. Do you think that the gas exporters in the world can form an organization like OPEC?

Answer: The Russian government is coordinating its policies on the gas market with Iran. To this effect, Iranian Ministry of Oil and the Russian Ministry of Energy have set up working groups. We are cooperating with Iran in this regard. The two countries hold the largest gas reserves in the world and they should cooperate and not compete.

Question: Russia has voiced its readiness to build a second nuclear power plant in Bushehr. What do you thinkabout Tehran-Moscow peaceful nuclear cooperation?

Answer: Russia proceeds with its peaceful nuclear cooperation with Iran. Of course, the Islamic Republic should meet its international commitments. We will have no problem if Iran declares its nuclear programs.
Regarding the spent nuclear fuel, the two countries have resolved their political problems and they have reached agreement. Russia delivers fuel to Iran and the latter returns the spent fuel to the former.