CNPC Ambivalence Over SP Project Draws Criticism From Iran's Oil Minister

EghtesadOnline: Oil Minister Bijan Namdar Zanganeh said Sunday China National Petroleum Corporation (CNPC) is still ambivalent after substituting the French energy giant Total in the $4.8 billion South Pars gas project.

News ID: ۷۴۶۷۲۰

18 February 2019

Citing a statement by Zanganeh to the semi-official news agency ICANA, the state-owned wire service IRNA reported that the Chinese firm officially replaced Total in November after marathon talks.

“CNPC has officially replaced Total but has not started work in a practical manner. Talks have been held with the Chinese about their plans. However, it is not yet clear whether or not” they are really interested in getting the multi-billion-dollar job done,” the minister said.

Majlis Speaker Ali Larijani will visit China this week and further negotiations are on the Oil Ministry agenda, Financial Tribune quoted him as saying.

In July 2017, Total signed a contract to develop Phase 11 of the SP gas field with an initial $1 billion investment. It had 50.1% stake in the project.

However, in August, the company had a change of heart after failing to obtain a waiver related to Iran sanctions from Washington.

In May of last year President Donald Trump abandoned the historic Iran nuclear deal and re-sanctioned Tehran. The new restrictions bar foreign companies from working in and with Iran. Those who ignore the US demands face tough economic penalties.

In defending its decision to pull out , Total said the SP project could pose financial risks for the company.

CNPC has 81% share in the project, which is said to hold the world’s largest natural gas reserves ever found in a single place. Iran’s PetroPars holds the remaining 19% stake.

South Pars is located near the joint border between Iran and Qatar off the Persian Gulf, with Iran’s share of the field estimated at 14 trillion cubic meters of gas and 18 billion barrels of liquefied natural gas.