China takes lead in world’s top gasfield
CNPC IS SET TO INCREASE ITS STAKE IN THE PROJECT FROM THE CURRENT 30% IN THE WAKE OF US-IRAN SANCTIONS
China National Petroleum Corp (CNPC) is expected to take the lead on a $5 billion (Dh18.36 billion) project to develop Iran’s share of the world’s biggest gas deposit, taking over from France’s Total SA, which halted operations after US President Donald Trump reimposed sanctions on the country.
State-owned CNPC, which joined a consortium with Total and Iran’s Petropars Ltd in 2016 to develop Phase 11 of the South Pars Gas field, is set to increase its stake in the project from the current 30 per cent. Total had originally agreed to take a 50.1 per cent interest.
CNPC will become the lead operating partner, the staterun Islamic Republic News Agency reported, citing Mohammad Mostafavi, National Iranian Oil Co’s investments and business head.
Terms of the contract haven’t yet officially changed, according to Shana, the Oil Ministry’s news service. Calls to CNPC went unanswered yesterday. Total declined to comment.
Total in a fix
Total, which finalised its agreement with Iran in July 2017, had already spent some €40 million ($45.7 million; Dh167.57 million) on the project when Trump announced in May that the US would exit the 2015 international nuclear deal with Iran and reimpose sanctions on Tehran.
Total had previously withdrawn from the field in 2009 because of sanctions. It planned initial investment of $1 billion for Phase 11, with the aim of eventually producing 2 billion cubic feet a day, or 400,000 barrels of oil equivalent including condensate, it said in July 2017. At the time, Total said the contract was for 20 years.
Last month, chief executive officer Patrick Pouyanne raised the prospect of Chinese groups joining Western companies in avoiding Iran due to sanctions.
“Within the US legal framework, we can’t work in Iran,” Pouyanne said July 7. “It’s impossible for a company like ours, and for most or even all global companies, even maybe the Chinese. Our partners haven’t told us yet that they will take over our stake in our project.”
CNPC has been active in Iran since 2004, operating in oil, gas and oilfield services, according to the company’s website. In
Total had previously withdrawn from the field in 2009 because of sanctions. It planned initial investment of $1 billion for Phase 11, with the aim of eventually producing 2 billion cubic feet a day, or 400,000 barrels of oil equivalent including condensate, it said last July.
2006, it was awarded a threeyear contract to provide offshore well-logging and other services at South Pars.
Active since 2004
CNPC has been active in Iran since 2004, operating in oil, gas and oilfield services, according to the company’s website. In 2006, it was awarded a threeyear contract to provide offshore well-logging and other services at South Pars.
A CNPC spokesman in Beijing could not immediately be reached to comment on the story. Two calls to his office outside of normal business hours went unanswered, and he didn’t reply to emailed questions.