Neka Port Resumes Oil Swap After Seven Years

EghtesadOnline: Oil and gas company Dragon Oil shipped an oil cargo from Turkmenistan to Neka Port in northern Iran for swap through the Persian Gulf, marking the first swap operation by Iran since 2010.

News ID: ۷۴۳۲۸۲

14 August 2017

Dragon, which is owned by Dubai-based Emirates National Oil Company, used to ship the crude it produces from an offshore development in Turkmenistan to Neka and receive crude produced by Iran at Kharg Island in the Persian Gulf.

The Russian-flagged VF Tanker-20 discharged around 6,000 tons of Turkmen-origin crude oil at the port of Neka on August 3, the National Iranian Oil Company's news portal reported.

The company moved about 80% of the crude it pumps from its 44,000-45,000 barrels per day field through a swap deal with Iran, with the remaining 20% marketed through Baku in Azerbaijan, according to Financial Tribune.

Dragon diverted all export volumes to Europe via Azerbaijan and Russia, which required paying higher transit fees, when the Iran route was closed down.

Oil swap can be an important source of revenue, as the northern neighbors with abundant hydrocarbon resources need access to the sea in the south.

Pointing to access to expansive equipment and pipelines in the country, Iran's Oil Minister Bijan Namdar Zanganeh has made it clear that the government of President Hassan Rouhani is pushing to resume swap operations with northern neighbors to make up for the hiatus. In 2010, former oil minister, Masoud Mirkazemi, said Iran had to stop buying crude under the name of swap deals that he had described as “national treason”.

According to Zanganeh, Iran is willing to start swapping oil and gas from Caspian Sea littoral states, provided Russia, Azerbaijan, Kazakhstan, Turkmenistan and Uzbekistan equally take measures and cooperate with Iran in this regard.