The managing director of Russias Krasnye Barrikady said on Saturday that his company has won a contract worth $1 billion to construct five offshore drilling rigs for Iran.

The deal was signed between Barrikady and Irans Tasdid Offshore Development Co. back in January.

Alexander S. Ilyichev said this will be the first Iran-Russia cooperation for construction of drilling rigs.

The rigs are planned to be used in Irans section of the Persian Gulf shelf.

Krasnye Barrikady is the first Soviet company to build offshore drilling rigs in the 70s and is currently busy will fulfillment of dozens of projects, said the Russian company official.

The official added that discussions over the project had been going on for almost two years.
The terms of the contract dictate that the project will also make use of Russian funds.

Iran is set to make a 15 percent down payment on the $200 million price of the first rig it has ordered.
The rigs will be constructed in Russia as modules and will be assembled in Iran through reverse engineering by domestic companies.

The construction of a total of 10 rigs through the same scheme is on the agenda.
Under the agreement, the two sides will jointly build rigs for exploration and production of hydrocarbons in the Persian Gulf waters, it was reported at the time, said PressTV.

New drilling rigs are expected to increase Irans ability to increase its crude oil production.