China too pulls out from Iran project

Tehran: China’s state oil company has pulled out of a $5 billion deal to develop a portion of Iran’s massive offshore natural gasfield, the Iranian oil minister has said. France’s Total SA had earlier withdrawn from the contract over US sanctions.

The South Pars field deal, struck in the wake of Iran’s 2015 nuclear deal with world powers, appears to be just the latest business casualty of America’s pressure campaign on Tehran. It also comes as China and the US engage in their own trade war, as Beijing and Washington levy billions of dollars of tariffs on each other’s goods.

Oil Minister Bijan Zangeneh said the China National Petroleum Corp. was “no longer in the project”. He did not elaborate or give any reason for the withdrawal.

Iranian Foreign Minister Mohammad Javad Zarif separately complained Sunday about the US campaign against Tehran and its impact on foreign investments. “We have been facing plenty of problems in the field of investment because of the US maximum pressure policy,” Zarif told a parliamentary committee. “We are trying to remove the problems.”

Iran holds the world’s second-largest known reserves of natural gas and the world’s fourth-largest oil reserves.

Strategic

Much of its natural gas comes from its massive South Pars field. The initial plan for the development of South Pars involved building 20 wells and two wellhead platforms, a project that would have a capacity of 2 billion cubic feet of natural gas a day.

Under terms of the initial deal, Total was to have a 50.1 per cent stake, with CNPC getting 30 per cent and the Iranian firm Petropars getting 19.9 per cent. With Total’s withdrawal, CNPC had taken over the French firm’s stake. Now Petropars will develop the field alone, Zangeneh said.