Iran enrichment: why Russia will not benefit from the lifting of sanctions from Tehran

In July, Iran agreed to the lifting of sanctions in exchange for control of its nuclear program. The compromise will open the Iranian market for international investment. Russia will not be able to take advantage of this.
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In late November, a visit of Russian President Vladimir Putin to Iran. According to the results of Moscow said Tehran is ready to provide export credit of $ 5 billion. Russia and Iran have selected 35 priority projects in various fields of economy. Shortly thereafter, one of the senior staff of the Ministry of Oil of Iran Mehdi Hosseini said that "Gazprom" and LUKOIL's a good chance for the resumption of work in the Middle Eastern country.

So Russia is preparing for the removal of the sanctions against Iran. Agreements have been reached on this in mid-July in Vienna - in the negotiations six intermediary countries (Russia, USA, France, UK, China and Germany). Tehran agreed to put its nuclear program under international supervision in return for Western rejection of prohibitive measures in the economy.

The sanctions regime

Now Iran are UN sanctions and sanctions imposed unilaterally by the United States and the European Union. UN sanctions generally relate to bans on deliveries to Iran advanced weapons, including missile technology. In addition, the Security Council NGOH imposed visa restrictions and froze the assets of some high-ranking officials and the military.

In contrast to the point of the UN sanctions, the restrictions imposed on Iran by the US and the EU, is much broader. The first sanctions against Iran were imposed by Washington immediately after the Islamic Revolution in 1979. In the 2000s, the US and EU imposed against Iran are a set of restrictions. Under attack proved to Iranian oil exports and the financial system. The sanctions were designed to force Iran to cooperate with the international community in the field of nuclear energy, not allowing the conversion of a civilian nuclear program to military.

Removing sanctions Iran opens up to foreign investment. At first glance, in Moscow, which for many years has supported Tehran were to be advantageous position in Iran. But experts and market participants warn that Russia will not be able to take advantage of their privileged position due to lack of financial resources, lack of deliberate state support measures, as well as the orientation of Iran on the development of cooperation, primarily with the European Union.

tasty Iran

In Augustuste World Bank predicted that the lifting of sanctions can provide in the 2016-2017 fiscal year, the growth of Iran's GDP by 5.1%, and in 2017-2018-m - 5.5%. In 2012 and 2013, Iran's GDP decreased by 6.8 and 1.2%, respectively. Last year, GDP grew by 3%, the forecasts for this year give the Islamic Republic of 3.2%.

The inflow of foreign direct investment, according to World Bank estimates, in 2016 and 2017 could be worth $ 3 billion and $ 3.2 billion respectively. According to the UN Conference on Trade and Development (UNCTAD), in 2013 and 2014, foreign direct investment in Iran was less than half they were $ 1.46 billion and $ 1.22 billion respectively.

Iran's attractiveness for investments is explained and significant oil and gas reserves. According to the US Energy Information Administration (EIA), Iran is in fourth place in the world's largest proven oil reserves - 158 billion barrels. Thus, Iran accounts for 13% of OPEC oil reserves. Natural gas reserves are estimated at 34 trillion cubic meters. m, which puts him in second place in the world after Russia.

Before the introduction of Western sanctions in 2006, Iran was producing about 4 million barrels. / Day ofof which 2.4 million were exported. As a result in 2014 production fell to 3.1 million barrels / day, and exports -. To 1.1 million barrels, shows OPEC statistics.

At the same time, despite the abundance of reserves, Iran's petrochemical industry in recent years experienced a decline due to the ban on the supply of imported equipment. This often led to a shortage of gasoline in the country, where he works only nine refineries, of which only one, in his own Iranian estimates, it gives an acceptable level of profit. Immediately after the signing of the July agreement, announced earlier this month a representative of National Iranian Oil Refining and Distribution Company, Abbas Kazemi, began negotiations with foreign investors to modernize the Iranian oil refineries. Refineries in Isfahan and Bandar Abbas are expected modernization of the $ 1.2 billion each.

The optimistic assessment of foreign experts confirm Russian businessmen who work in Iran. "The country has a lot of stopped production, which can quickly start again. If funds become available, they will make a leap "- believes gendirektoengaged in the organization of trade shows in Iran of "RusIranEkspo" Alexander Sharov. I agree with him a senior fellow at the Center for Middle Eastern Studies of the Institute of Oriental Studies Lana Ravandi-Fada.

Removal of sanctions means and the gradual thawing of the Islamic Republic of significant funds in Western banks. Their exact amount is unknown:. Iran's Central Bank called for $ 107 billion, in the Majlis of the Islamic Republic discussed the figure of $ 130 billion from these funds, Iran will be able to immediately after the lifting of sanctions to get about $ 50 billion, he said in the summer of this year's Congress, Finance Minister With SHA Jack Lew.

Low start

In 2014 the volume of Russian-Iranian trade turnover was $ 1.68 billion. At the peak three years earlier it reached $ 3.7 billion. Last year, the total volume of Russia's foreign trade has decreased, but trade with Iran, on the contrary, increased by 5%. "Russian-Iranian trade growth in 2014 after three years of falling - it is rather a stabilization. Prior to that, for three years, trade was reduced, "- said RBC Advisor Program" Foreign and Security Policy "; Moscow Carnegie Center Nikolai Kozhanov.

The structure of the Russian-Iranian trade has remained unchanged since the beginning of the 2000s. The basis of Russian exports are metals and engineering products - about 54%, wood pulp and paper products - 7%, cereals - 6%. Iran supplies to the Russian food and agricultural products - they account for 85% of turnover.

According to the chairman of the Russian-Iranian Business Council, Viktor Melnikov, according to realistic estimates, the trade turnover between Russia and Iran could reach $ 10 billion. Interviewees RBC experts believe that Russia, after the lifting of sanctions with Iran could increase the supply of engineering products to Iran to strengthen cooperation nuclear energy and arms market.

"Tehran has no illusions that the West will be with him to develop relations in the field of armaments, and it has ambitions in the region who need something to eat. Russia and maybe China - natural partners for cooperation ", - the expert believes Carnegie. In the nuclear power industry it predicts the competition with a hundredRhone Europe and Asia, because the Iranians are counting on diversification in this area. "Russia has the advantage - we build a fast, reliable and relatively cheap", - says the parchments.

While the most famous Russian energy project in Iran is the Bushehr nuclear plant. The representative of "Rosatom", said the company did not disclose the cost of construction of the first nuclear power plant unit. In November 2014, "Rosatom" has signed a contract to build a second nuclear power plant in Bushehr queue. Its price also was not disclosed, but, according to experts, it can reach $ 10 billion.

In the area of ​​military-technical cooperation is best known deal in 2007 to sell missile systems to Iran of S-300. It was estimated at $ 800 million, but has never been implemented. The former at that time the president of Russia Dmitry Medvedev signed a decree banned the delivery systems to Iran, referring to UN sanctions. The new contract for the delivery to Iran of S-300 was signed in early November. Its amount is unknown.

Weapons for Iran

Iran, though not one of Russia's largest partners in the fieldmilitary-technical cooperation, but its volume can be called significant, RBC says expert at the Center for Analysis of Strategies and Technologies economist Vasily Kashin. Now Russia is supplying Iran with electronic warfare systems that are critical to aviation and air defense forces, own air defense, anti-tank guided missiles, military transport aircraft and helicopters, as well as modernizing the already existing Soviet equipment Iran, says the expert. According to him, we can talk about hundreds of millions of dollars a year.

Deliveries of armored vehicles, warplanes, helicopters and missile systems to Iran is prohibited by resolution of the UN Security Council. Cancellation of financial sanctions will not change the range of weapons supplied by Iran, but promotes the growth of the military-technical cooperation, said Cashin. The representative of "Rosoboronexport" is unable to provide the RBC-line comment for deliveries to Iran. In 2014, according to the Federal Customs Service, in Iran by a secret code that can conceal arms deliveries, Russia supplied produktion of $ 4.3 million.

Russian and Iranian hydrocarbons

One of the promising directions of activities in Iran Melnikov believes exploration. According to him, Russian geologists believe that Iran subsoil explored "no more than 10% - where the whole periodic table." Russia could also participate in the modernization of oil and gas production equipment and raw materials transportation infrastructure in Iran, explains RBC Ravanda-Fada.

Status of the Iranian oil and gas industry - debatable issue among experts. From it depends on how soon Iran will be able to increase the supply of raw materials on the world market. From the volume of supply is directly dependent on oil prices. Most experts believe that Tehran will take time to ramp up exports. In particular, it said Ravanda-Fada. According to various estimates, it is a term of up to two years.

In November, Iranian Oil Minister Bijan Zanganeh said that immediately after the sanctions were lifted at the beginning of 2016, Iran is ready to supply the world market of an additional 500 thousand. Bbl. / Day in addition to the current 2.8 million barrels. In 2017, Iran NarasTitus exports by 1 million barrels. / day. In the August forecast of the World Bank quoted Iranian officials who expressed the need for investment in the oil industry at the level of $ 130-145 billion by 2020. They only need to save the oil production at the current level.

A source close to the Ministry of Economic Development, told RBC that is "Tatneft" in terms of investment in the most advantageous position in the country. In 2011, she signed a contract with Iran's NIOC to $ 700 million for development of the field "Zage" in the south-western part of Iran. Representatives of the company told RBC that "the company is exploring the possibility of cooperation [with Iran] to the requirements of international norms and laws."

Projects in Iran were interested in "Gazprom Neft", "Rosneft", Lukoil, "Zarubezhneft", but so far signed agreements with the Iranians do not have. LUKOIL has worked since 2003 in Iran in cooperation with Norway's Statoil oil field "Anaran" with reserves of 2 billion barrels. The company was forced to withdraw from the project after the imposition of sanctions, and agreement to take the place of LUKOIL "Gazpromm oil "Iran terminated in 2011. In April this year, the head of the Russian company, Vagit Alekperov expressed hope that the political dialogue will lead to the lifting of sanctions and will allow LUKOIL to return to the project.

In addition, Iran has the potential to significantly increase the production of natural gas. Estimates National Iranian Gas Company (NIGC), only recoverable reserves of "South Pars" field is 16 trillion cubic meters. m. The field occupies 3700 square meters. km, it contains 8% of world gas reserves and 50% of the total reserves of Iranian gas. In 1997, "Gazprom" became a member of the consortium for the development of phase II and III "South Pars". Because of disagreements with the Iranian side, and later because of sanctions the Russian company did not increase their participation in the project. In 2008, the project came from European companies: Italy's ENI and France's Total. At the time of publication notes representative of "Gazprom" has not responded to a request to RBC.

In July of this year, Energy Minister Alexander Novak said: "If the will be lifted definitively all the sanctions, our company will be happy to participate in the projects in the catoryh they had participated (including "South Pars" and "Anaran"). We can now discuss the prospects of development of <...>. We will come up with such proposals. I think the Iranians will come out. "

Whose money

The issue of investment and the ability to provide credit will be for Russian companies in Iran key, believe RBC interviewed experts and market participants. In this respect they are inferior competitors from the European Union.

German Union of Industrialists and Entrepreneurs (BDI) in the summer of this year, predicted that after the lifting of sanctions, German exports to Iran will increase from € 2,4 billion in 2014 to € 10 billion in the medium term. The Italian government agency SACE believes that in 2015-2018 years of Italian exports to Iran will increase by € 3 billion Until the introduction of EU sanctions Italy was the largest trading partner of Iran among the European countries -. The trade turnover amounted to € 7 billion, in 2014 - only € 1 billion, argued in August about the prospects for restoring relations, Minister of economic development of Italy Federica Guidi.

Melnikov noticed Thuof EU companies are ready to provide large and long-term - five to ten years - loans. The main competition, he said, was carried out in the sphere of lending. I agree with him and the ball. "Now in Russia, only three banks working with Iran - Tempbank, Asia Bank and Mir Business Bank», - he said.

Russian companies are paying too much attention to the current sanctions are now, says Balls. "Even if the European and American companies officially went from Iran, they left loopholes", - he said. "No one will wait for the lifting of sanctions, all ready to work with Iran in a new environment", - he said. However, it says the Handelsblatt German, and European banks are in no hurry to restore relations with Iran. "Nobody wants to be first returned to Iran in the eyes of the US authorities," - the newspaper quoted an expert law firm Clifford Chance Tim Niklas Mueller.

The inertia and laziness

Asked not to be named ex-representative of a Russian state-owned companies in Iran gave the example of the machine-building concern "REPOlding, "which, for fear of sanctions, can not carry out the modernization of power plants in the Islamic Republic. "Place" REP Holding "may take Siemens, whose products may assign" Nevsky Zavod "- says the source of RBC. Now, he said, Iran's ban on imports of products already produced in the country. European companies are leading the way of localization of production, he said.

"State Corporation KLA and USC may not work in Iran. They are simply there are not certified. Iranians perceive them as intermediaries. They are required to work directly with the manufacturer, which will then provide service support ", - said the source RBK.

As the representatives of "REP Holding" "currently active projects with Iranian partners are absent, but the company is interested in the resumption of work in the market, for example in the field of modern energy supply and electrical equipment, as well as the modernization of previously installed turbo-compressor units."

An expert on Russian-iraskim Relations University of Manchester, in the past - the head of representation "Tekhnopromexport" in Iran - Denis Volkov highlighted several aspects that hinder the promotion of Russian business in the country.

These he took administrative-command way of the local economy, partly reminiscent of the Soviet Union, and the lack of coordination between the various departments. As an example he cited the situation with the "daughter" "Rostec" company "Tekhnopromexport" in the mid-2000s. She had to take energetic measures of diverse nature, to ensure the return of the influential Organization of Iran's Social Security significant amounts due under the contract the Russian company and the local Iranian law for many years. The intervention of the Foreign Ministries of both countries, the Iranian Ministry of Energy and Intergovernmental Commission has not produced effective results, Volkov said. As a result, the company has achieved its goal by using their tactics.

In 2006, the question was raised about the complete withdrawal "Tekhnopromexport" from Iran, butLater cooperation was resumed. During the last Putin's visit to Iran is among the signed agreements was also a contract for the construction of "Technopromexport" two thermal power 2 GW, the transaction value is estimated, according to preliminary estimates, at $ 3 billion. At the time of publication notes representative "Tekhnopromexport" did not provide comment.

Strategic obstacle for Russian business in Iran Volkov considers historical (often just unconscious) orientation of the country to the West. As a significant appendage, with the 1990s because of corruption in Russia, the cost of Russian equipment and engineering services is often higher than their Western counterparts, and the level of technology and performed works - lower the expert.

"The leaders of the Iranian companies were shocked when they asked Russia" kickbacks "for the opportunity to purchase Russian products," - said Volkov. In 2014, in the Corruption Perceptions Index Transparency International Iran, like Russia, has held the 136-th place in the world.

"Russian companies are too inertand lazy to take advantage now of the opportunities that exist in Iran. We have already lost a few years, only a few months left in us to dramatically improve the level of our economic relations ", - said chairman of the bank's Asia Farhad Saidi. "If the situation does not change, there will be only due at the government level. No business activity between Russia and Iran will not "- said the banker. The current state of Russian-Iranian economic relations, according to him, like a building with a roof in the form of governmental agreements, devoid of inner content.