Iran's New Year gift to Asian oil partners

Ulhas Joglekar ulhasj at
Sat Dec 11 19:19:15 MST 1999

11 December 1999
Iran's New Year gift to Asian oil partners
TEHERAN: Iran's oil ministry will provide central Asian oil swap partners a
special New Year's bonus, consisting of a 30 per cent cut in oil swap rates,
the English-language Iran Daily said.
"Iranian oil swap deals will be pursued with a 30 per cent discount from
January 1, 2000," Iranian Oil Minister Bijan Zanganeh told the daily in an
exclusive interview on Thursday.
"The decision has been taken to provide better facilities for the transport
of central Asian states' oil," Zanganeh said. The current rate for each
tonne of swapped oil is $24, but the figure "will be reduced to $17 from the
beginning of the new millennium," he said. The paper also cited an unnamed
energy expert as saying Iran would even reduce the rate to "$12 per tonne in
the near future".
Teheran has insisted that a pipeline through Iran and oil swaps between
Caspian producers and itself are the most economical ways to transport the
Caspian Sea's oil to world markets. But the US, which has great influence on
Kazakhstan and Turkmenistan, has been working to push another route
bypassing Iran, due to its complete embargo against Teheran.
Iran and Kazakhstan signed a contract in 1996 providing for 2 million tonnes
of Kazakh crude to be delivered annually to northern Iran, while Iran
supplies the same amount from its own wells to the Gulf for export on behalf
of Kazakhstan. However, the accord, which avoids more arduous transport
routes, has been intermittent.
In late November, an agreement was reached for pipelines from the
resource-rich sea to run through Turkey instead of Iran. The pipeline
accords were signed on the sidelines of November's Istanbul Summit of the
Organization for Security and Cooperation in Europe by the presidents of
Turkey, Azerbaijan, Georgia and Turkmenistan.
The pipelines will cut out Iran and lessen the dependence of the former
Soviet republics on Russia, which currently controls a large amount of the
region's oil and gas resources. The pipelines will also give the US a major
economic and political foothold in the turbulent caucasus region.
For reprint rights: Times Syndication Service
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Bennett, Coleman & Co. Ltd. 1999.

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