Zarubezhneft, the only Russian company that received a contract in Iran, has sold its subsidiary ZN-Vostok, an operator of production projects in this country, to federal state unitary enterprise Promsyriyoimport of the Russian Energy Ministry.

Zarubezhneft created ZN-Vostok in September 2017. In March of this year, the Russian company together with local Dana Energy signed a service contract with national Iranian Corporation NIOC for development of two oil production blocks in Iran: Aban and Western Paydar. This contract and licenses to develop the Iranian sites were transferred to ZN-Vostok. In addition, within the framework of ZN-Vostok a team to work at the Iranian projects was formed, and preparations for their implementation began. In April this year, ZN-Vostok opened its branch in Tehran.

At the end of October, ten days before the possible date of the introduction of the anti-Iranian sanctions, according to the SPARK-Interfax, ZN-Vostok moved to the balance of the only subsidiary of Promsyriyoimport - Dobycha-Aktivy, which was established in August 2018. A source close to the Russian company said that Zarubezhneft completely withdrew from the projects in Iran, transferring its assets to Promsyriyoimport.

According to him, "the decision to sell the asset was made at the state level in order to ensure the continuation of the effective work at the oil production projects in Iran. In fact, with this scheme, Russia retained control over the project, its implementation will continue according to the previously approved plan," the source noted.

"As of the moment of the sale of the asset, all obligations under the previously concluded agreement were fulfilled by Zarubezhneft in full. The project was at the initial stage of the implementation, the project costs were minimal," - he said.

The reason for the withdrawal of Zarubezhneft from the project was the threat of the US sanctions against Iran from November 4.

An official representative of Zarubezhneft declined to comment on this issue. Promsyriyoimport is a government-authorized organization for the purchase of Iranian oil under the oil-for-goods transaction. In 2017, Iran and the Energy Ministry of Russia signed a contract for the supply of Iranian oil to world markets through Promsyriyoimport in the volume of up to 5 million tons. The first Iranian oil tanker under this contract was shipped in mid-November 2017. The deliveries were then suspended. In September 2018, the head of the Energy Ministry Alexander Novak said that the supply of Iranian oil resumed.

Zarubezhneft works with Petrovietnam on projects in Vietnam and Russia, as well as with Total and Equinor on project of production sharing agreement for development of the Kharyaga field.

KeyFacts Energy Industry Directory: Rusmininfo