Asia > Eastern Asia > China > CNPC leaves Iran’s energy projects

China: CNPC leaves Iran’s energy projects

2014/04/22

China National Petroleum Corporation (CNPC) has left Iran's oil projects as an ultimatum over its continuous delays has expired.

Iran issued an ultimatum to CNPC on February 18 over its continuous delays in developing the South Azadegan oilfield.

At the time, Iranian Oil Minister Bijan Namdar Zanganeh said if this trend continues, CNPC will be expelled from the project.

The presence of CNPC in Iran will depend on changing its behavior within the 90-day ultimatum which has been given, Zanganeh said.

Tasnim news agency before reported that CNPC is on the verge of quitting Iran's South Azadegan oilfield development project.

CNPC had been awarded with developing North Pars oilfield, Yadavaran joint oilfield, North and South Azadegan fields, and the phase 11 of the South Pars gas field. Due to its repeated delays, the company has been expelled from the South Pars and the North Pars projects, and they are on the verge of being expelled from the South Azadegan project.

CNPC has been in charge of developing the field for seven years. However, only seven out of the projected 185 wells of the initial phase of the oilfield have been drilled so far, the managing director of Iran's Petroleum Engineering and Development Company (PEDEC), Abdolreza Haji Hosseinnejad said in February.

"The project is only seven % complete," he noted.

"CNPC was supposed to use 25 drilling rigs at the joint oilfield, but currently only five drilling rigs are active there," he added.

The oilfield is projected to produce 320,000 barrels of oil per day.

CNPC signed a memorandum of considerate with National Iranian Oil Co in 2009, promising to pay 90 % of development costs for the South Azadegan oil field while taking ownership of a 70 % stake. An Iranian official said the project needed investment of up to $2.5 billion

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