Russia’s Tatneft has denied signing an agreement with Iran’s state-owned Petroleum Engineering and Development Company (Pedec) to develop the Zagheh oil field.

The Oil Ministry’s Shana news agency reported the signing of a $1bn agreement on 18 December, but Tatneft’s press office issued a day later after denying the report.

“…Tatneft Group have not entered into any agreements, contracts and have not accepted any other undertakings relating to oil and gas projects in Iran,” says the statement.

Reports from Iran’s government linked media outlets have varied on the deal. The semi-official Press TV cites a statement from the Russian Republic of Tartaristan, where Tatneft is based, saying the agreement was signed by Tatneftekhiminvest-Holding, a scientific center.

Iran plans to develop the oil field in the southern Bushehr province to produce as much as 7,000 barrels a day (b/d), rising to 55,000 b/d in the second phase. Production is expected by 2014.