Energy Minister Sergei Shmatko mapped out plans for lasting cooperation on energy with Iran on Wednesday as Russia sought to soothe Tehran's worries after backing UN sanctions against the Islamic Republic, where it has lined up major deals.
Relations have chilled as Russia improved ties with the United States, a forceful advocate of the sanctions. President Dmitry Medvedev has said Moscow was running out of patience with Iranian unwillingness to address Western fears over its nuclear program.
Shmatko and Iranian Oil Minister Masoud Mir-Kazemi signed a "road map" outlining long-term energy cooperation Wednesday and said they would aim to form a joint bank to help fund bilateral projects and expand cooperation in natural gas deliveries and oil products.
"Sanctions will not hinder us in our joint cooperation," Shmatko said when asked about joint projects after the signing ceremony.
Mir-Kazemi said the sanctions have had no impact on Iran because it had begun to rely even more on its own resources and said the measures were only damaging the activities of companies that were willing to work with Iran.
Gazprom, Gazprom Neft and LUKoil have signed billions of dollars worth of deals to help Iran develop its oil and gas fields, but most projects are on hold because of sanctions.
Partly for this reason, analysts say, Russia wants to walk a safe path between sanctions and its wish to maintain links with a fellow oil and gas power.
Shmatko also said Russian firms could supply Iran with refined oil products.
U.S. laws sanction any company worldwide that exports motor fuel to Iran in an effort to deter Tehran's nuclear enrichment activities. Iran says its nuclear activities are peaceful and not aimed at developing weapons.
Iran, dependent on imports to satisfy its citizens' voracious appetite for state-subsidized gasoline, has been shunned by many of its traditional suppliers, including independent trade houses and the trade arm of LUKoil.
"We have not discussed trading operations, but if there are commercial interest and attractive terms, Russian companies are ready to supply oil products to Iran without any doubt," Shmatko said.
The text of the pact said the two countries would aim to increase cooperation in transit, swaps and marketing of natural gas as well as sales of petroleum products and petrochemicals.
"We are neighbors, and if a big project to create a south-north transport corridor is implemented, I believe that we will create long-term supply opportunities, including for oil products," Shmatko said.
The two ministries also said they agreed "to prepare a broad joint road map for agreement on activities in power, nuclear energy and renewables."
The ministers will meet again in the fourth quarter of 2010 to finalize agreements.
Executives of major Russian and Iranian companies were present at the signing ceremony on Wednesday, but agreed to only two deals to boost cooperation.
The National Iranian Oil Company signed a protocol with Russian gas engineering company Cryogenmash to help it supply gas to 8,000 cities and villages in Iran with the use of liquefied natural gas technology.
Russian power engineering firm REP Holding signed a deal with NIOC to help modernize the Iranian oil industry. No further details were given during the signing.