Iran

Oil Minister Bijan Namdar Zangeneh and Russian Minister of State Property Farit Rafikovich Gazizullin, who co-chair the Iran-Russia Joint Economic Commission, yesterday discussed ways of boosting nuclear cooperation and bilateral ties in the economic sphere. They also exchanged views on the long-term programs to broaden economic and trade relations.

Zangeneh commented on his positive talks with Russian Energy Minister and said practical steps have been taken to boost mutual economic ties. He said a meeting with Iranian and Russian representatives should be held on how best to accelerate functioning of the joint economic commission.

Gazizullin was pleased with the good bilateral ties between the two countries and expressed the hope they would improve further in future. He said it is essential for both countries to embark on joint activities relating to the export of gas while giving high attention to the North-South corridor project.

Iran and Russia have discussed the draft of a long-term bilateral economic agreement. After talking to Zangeneh, Russian Deputy Prime Minister Victor Khristenko stressed the potential for further cooperation in the energy sector. The 10-year agreement will pave the way for wide-ranging economic cooperation between the two countries, including the energy sector. The two sides also discussed possible ways for expanding non-OPEC Russia's contacts with OPEC in order to establish a stable oil market.

Zangeneh held further talks with Energy Minister Igor Yusufov, in which they discussed Russian investments in Iran's South Pars, which is said to be the world's biggest independent gas field. Yusufov intimated his country's interest in gas cooperation with Iran, saying he hoped Russian companies would actively participate in the South Pars gas development projects. He suggested coordinating gas exports to Turkey with Iran and announced Russia's readiness to cooperate with OPEC on "fair pricing" of oil.

Another issue raised during Zangeneh's talks with Russian officials was the Caspian Sea, where the littoral states are quarreling about the sea's legal status. Zangeneh said Tehran and Moscow had so far not discussed cooperation on this subject and must improve their coordination to this effect. Yusufov hoped that the two countries would have "constructive cooperation" over the Caspian Sea.

The littoral states of the Caspian Sea - Iran, Russia, Azerbaijan, Kazakhstan and Turkmenistan - are at odds over the division of the land-locked sea, which still lacks a new legal regime to exploit its resources. Iran and Russia used to share the sea, but since the collapse of the Soviet Union and the birth of the three other republics they have had to redraw the Caspian Sea's marine borders.

Note: The difficulties of settling the Caspian Sea problem are due to Iran's unreasonable claim to 50% of its mineral wealth on the strength of past agreements forced on the USSR during its early days. By now Iran has abandoned this position, but still wants more than its fair share according to the length of its coastline. Russia has a clear interest in protecting the rights of Kazakhstan and Turkmenistan in these negotiations. An agreement between OPEC and Russia would be serious blow to Western economies - unless it spurs a Western switch to non-oil energy. At this stage it is unlikely that nuclear cooperation between Russia and Iran will extend to the military sphere, if only because Russia's Chechen problem is making it aware of the risks involved of creating a potential source of nuclear weapons for Moslem terrorist organizations sponsored by Iran.