CNPC will take over from To­tal in Iran’s gas devel­op­ment

Cape Times - - INTERNATIONAL - Gol­nar Mote­valli

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.

PHOTO: QILAI SHEN/BLOOMBERG

CNPC chair­per­son Wang Yilin says CNPC will take the lead in Iran’s $5 bil­lion gas devel­op­ment.

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