CNPC will take over from Total in Iran’s gas development
CHINA National Petroleum Corporation (CNPC) is expected to take the lead on a $5 billion (R70.14bn) project to develop Iran’s share of the world’s biggest gas deposit, taking over from France’s Total, which halted operations after US President Donald Trump reimposed sanctions on the Islamic republic.
State-owned CNPC, which had joined an original consortium involving Total and Iran’s Petropars in 2016 to develop Phase II of the South Pars Gas field in the Persian Gulf, is set to increase its stake in the project from the current 30 percent. Total had originally agreed to take a 50.1 percent stake in the development.
CNCP will become lead operating partner in the project, state-run Islamic Repub- lic News Agency said, citing Mohammad Mostafavi, National Iranian Oil Company investments and business head. Terms of the contract have not yet officially changed, according to Shana, the oil ministry’s official news site. Calls to CNPC went unanswered yesterday and a company spokesperson didn’t immediately respond to a request for comment.
Total, which finalised its agreement with Iran in July 2017, had already spent some
40 million (R640.14m) on the project when Trump announced in May that the US would exit the 2015 nuclear deal, formally known as the Joint Comprehensive Plan of Action, and reimpose sanctions on Tehran lifted after the accord was signed.
The first round of US sanctions was put back into place last week, with more to come in November, greatly complicating efforts by companies that rushed into Iran after the 2015 nuclear accord was signed by Iran, the US and five other countries plus the EU.
Under the deal, Iran agreed to take steps to limit its nuclear programme, and to submit to verification by the International Atomic Energy Agency in return for economic sanctions relief.cScores of European companies, including Total, have withdrawn their operations and investments from the oil-rich Persian Gulf country since the US reversal. Trump marked the return of sanctions with a tweet on August 7: “Anyone doing business with Iran will NOT be doing business with the US.”
Iran, which holds the world’s largest gas reserves, shares South Pars, also known as the North Dome field, with neighbouring Qatar.
Total had previously withdrawn from South Pars in 2009 because of sanctions. It planned an initial investment of $1bn for Phase II, with the aim of eventually producing 2 billion cubic feet a day, or 400 000 barrels of oil equivalent a day, including condensate, the company said in July 2017.
CNPC chairperson Wang Yilin says CNPC will take the lead in Iran’s $5 billion gas development.