Iran Says China's CNPC Pulls Out of Gas Project

Iran's oil minister said Sunday that China's CNPC has withdrawn from the development of an offshore gas field and that state-owned Petropars will take over the entire project.

The South Pars gas field was to be developed jointly by France's Total, China National Petroleum Corporation and Petropars under a $4.8-billion deal signed in July 2017.

The deal came after Iran reached a 2015 agreement with world powers that gave it relief from sanctions in exchange for limits on its nuclear program, ending years of economic isolation.

Total left the project three months after US President Donald Trump's administration withdrew from the nuclear accord in May last year and reimposed sanctions on Iran's oil industry and other key sectors of the economy.

"Phase 11 (of South Pars) will be entirely developed by Petropars company," Iran's Oil Minister Bijan Namdar Zanganeh was quoted as saying by the ministry's official website.

Asked whether CNPC International had abandoned the project, Zanganeh said:

“Yes, they have.”

The other parties to the Iran nuclear deal—Britain, France, Germany, China and Russia—have vowed to stay in the accord despite the US withdrawal, but their efforts have so far borne no fruit.

Zanganeh said that Petropars did not take the lead on South Pars from the outset because "we wanted to attract foreign investment for this project" and that Petropars was "supposed to learn alongside these (foreign) companies".

He added that the development of a pressure booster platform would depend on talks between Iran's MAPNA Group and other companies.

Petropars signed a $440 million agreement in September with another state-owned firm, Pars Oil and Gas Company, to develop the Balal field in the Persian Gulf.

Photo: IRNA

Iran Says China Group Ready to Replace Total on Gas Deal

Chinese state-owned oil company CNPC will replace Total on a major gas field project in Iran if the French energy giant pulls out over renewed US sanctions against Tehran, Iran's oil minister has said.

"Total has said that if it doesn't get an exemption from the United States to continue its work, it will begin to pull out of the deal," Bijan Namdar Zanganeh was quoted as saying by his ministry's Shana news service. 

"If that happens, the Chinese firm CNPC will replace Total."

Total started the USD 4.8-billion South Pars 11 project in July 2017, two years after Western powers signed a nuclear deal with Tehran prompting the return of many businesses to Iran.

But earlier this month, US President Donald Trump announced his withdrawal from the deal, and warned companies that they face sanctions if they do business with Iran.

The French group said Wednesday it has USD 10 billion of capital employed in its US assets, and US banks are involved in 90 percent of its financing operations, making Total highly vulnerable if targeted by any US actions.

By contrast, Total said it had spent less than EUR 40 million euros on the Iranian project, which it runs with its partner Petrochina and which is dedicated to the supply of domestic gas inside Iran. 

Zanganeh said on Wednesday that were CNPC, which was part of the Total deal, unable to carry out the work in South Pars due to US sanctions it would fall to Iran's Petropars. 

Iran possesses the second-largest gas reserves on the planet, after Russia, and the fourth largest oil supplies. 

Photo Credit: IRNA