July 22 (Reuters) - Russia, the world's largest oil producer, must carve a careful path between its efforts to improve ties with Washington and its historic relationship with Iran, a fellow oil and gas power.
WHAT IS RUSSIA DOING IN IRAN'S ENERGY SECTOR?
Russia's main energy project in Iran -- the Bushehr nuclear power plant, which is under construction by Russian firms -- is also at the crux of U.S. fears that the Islamic Republic could acquire nuclear weapons.
Russia has long said the reactor is purely for civilian electricity supply, but President Dmitry Medvedev recently said Iran was close to acquiring nuclear weapons, sparking speculation that Russia was distancing itself from Iran.
In hydrocarbons, state-controlled Gazprom's (GAZP.MM) contribution to a $2 billion consortium investment in Iran's giant South Pars gas field is a major cross-border investment.
Its oil arm also has a memorandum of understanding to develop two Iranian fields.
But Gazprom has indicated that deals can be finalised only when it is not at risk of sanctions.
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