Iran, China Discuss Avenues of Expanding Petroleum Cooperation

EghtesadOnline: The oil minister-designate, Javad Owji, met Deputy Director of the Middle East Division of China National Petroleum Corporation Libin Zhang in Tehran on Thursday, in his first meeting with foreign companies.

News ID: ۷۸۶۹۳۹

04 September 2021

During the meeting, the officials discussed ways of expanding bilateral cooperation in the field of petroleum, the Oil Ministry’s news agency Shana reported.

China has always opposed unilateral US sanctions against oil producers and continues to buy crude, especially from Iran.

Iran’s oil sales to China remain the key remaining revenue stream for the country.

In the past three years, China has been Iran’s top crude oil customer despite American sanctions on Iranian oil exports that were imposed on Iran in 2018 after the US withdrew from the nuclear deal Iran had signed with world powers in 2015.

CNPC has already participated in the development of Iran’s North Azadegan Oilfield, the first phase of which became operational in 2016.

With an area of 1,500 square kilometers, Azadegan Oilfield is located in the southwest, near the Iran-Iraq border.

China was also Iran’s biggest trade partner in the last Iranian year (March 2020-21) as the East Asian country was responsible for almost a fourth of imports and exports registered by Iranian customs offices.

Top economic officials in Iran said in April that the country is capable of increasing the value of its exports to China to $27 billion in the next few years.

Economic authorities and trade experts maintained that Tehran and Beijing have agreed to exponentially increase trade relations after signing a 25-year document to nearly $27 billion from the previous $9 billion.

In March, China and Iran officially stated they would boost their energy and political cooperation as part of the 25-year strategic partnership agreement.

Iran and China signed the deal to expand relations in the fields of energy, infrastructure, industry and technology.

The two countries also pledged to boost cooperation in fossil fuels and alternative energy, security of demand and supply as well as the supply of fossil fuels.

As per the deal, the Chinese side will consider financing and investing in the upstream and downstream projects of Iran’s energy industries and the Iranian side shall provide the necessary facilities and support in this respect.

Iranian President Ebrahim Raeisi, who took office last month, also vowed to boost cooperation between Iran and China.

Welcoming Investments in Gas Sector

Shana reported Owji as saying that Iran welcomes any domestic and foreign investment for the development of gas fields with the priority of maintaining production from the South Pars Gas Field.

The minister made the statement during his first visit to the Pars Energy Special Economic Zone in Asalouyeh in the southern Bushehr Province at the weekend.

In a meeting with oil industry managers, the minister said, “Fuel supply for the winter is one of the current priorities of the oil industry and it has been predicted that we will face a 10% increase in gas consumption this year.”

He hoped that with the help of ongoing efforts, the country will be able to overcome the winter fuel challenge without any problem.

Owji noted that the petrochemical industry has met a large part of the country's hard exchange needs in recent years.

“We expect more development in this industry so that it can complete the value chain of various products,” he added.