Iran says Chinese state oil firm withdraws from $5bn deal

The oil minister said Iranians will redevelop the portion of its South Pars oil field on their own. (File/AFP)
Updated 07 October 2019

Iran says Chinese state oil firm withdraws from $5bn deal

  • Petroleum firm’s pullout is the latest business casualty of American pressure campaign on Tehran
  • In late September, the US sanctioned Chinese shipping firms it said were ferrying Iranian crude oil

TEHRAN: China’s state oil company has pulled out of a $5 billion deal to develop a portion of Iran’s massive offshore natural gas field, the country’s oil minister said Sunday, an agreement from which France’s Total SA earlier withdrew 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 following President Donald Trump’s unilateral withdrawal of the US from the deal.

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, quoted by the ministry’s SHANA news agency, said Sunday that the China National Petroleum Corp. was “no longer in the project.” He did not elaborate or give any reason for the withdrawal, though SHANA said the company “had pulled out of a contract” to develop the field.

Officials in Beijing didn’t immediately acknowledge their decision. Phone calls to the CNPC rang unanswered on Sunday and its website bore no mention of the withdrawal.

However, Iranian Foreign Minister Mohammad Javad Zarif separately spoke 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, according to the semi-official Tasnim news agency. “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.

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 percent stake, with CNPC getting 30 percent and the Iranian firm Petropars getting 19.9 percent. With Total’s withdrawal, CNPC had taken over the French firm’s stake. Now Petropars will develop the field alone, Zangeneh said.

Total first pulled out of Iran in 2006 as UN sanctions first took hold over fears Iran’s atomic program would be used to build nuclear weapons. Tehran has maintained its program is only for peaceful purposes. Iran canceled another CNPC contract in 2012 amid increasing international sanctions which led to the 2015 nuclear deal.

After withdrawing from the nuclear deal with Tehran over a year ago, the US imposed sanctions on Iran that have kept it from selling its oil abroad and have crippled its economy. Iran has since begun breaking terms of the nuclear deal. In late September, the US sanctioned Chinese shipping firms it said were ferrying Iranian crude oil.

There also have been a series of attacks across the Middle East that the US blames on Iran. Tensions reached their height on Sept. 14, with a missile and drone attack on the world’s largest oil processor in Saudi Arabia and an oil field. 

Gulf countries reject US position on Israeli settlements, Arab League calls emergency meeting

Updated 3 min 36 sec ago

Gulf countries reject US position on Israeli settlements, Arab League calls emergency meeting

RIYADH: Saudi Arabia said on Wednesday it completely rejected Washington’s statement on Israeli settlements in the West Bank, state news agency SPA reported.
US President Donald Trump’s administration on Monday abandoned the position held by the United States for four decades that the settlements were “inconsistent with international law.” 
An official foreign ministry source expressed “the Kingdom’s utter rejection of the US government’s statements that the Israeli settlements in the West Bank are legitimate and do not violate international law.”
The source added that Israel’s construction of the settlements is contrary to the resolutions of international legitimacy and international law, and stands as an obstacle to achieving peace and stability in the Middle East and a two-state solution.
The source said that achieving lasting peace requires the Palestinian people to obtain their full legitimate rights in accordance with the Arab Peace Initiative and the resolutions of international legitimacy.

The United Arab Emirates also stressed the need to abide by the resolutions of international legitimacy and the Arab Peace Initiative, which are relevant to the West Bank, including Security Council resolutions stating that Israeli settlements are illegal.
In a statement, the Ministry of Foreign Affairs and International Cooperation called on the UN Security Council to abide by the Security Council resolutions stating that Israel should stop settlement activities in the West Bank, including East Jerusalem, and called on the international community to shoulder its responsibilities toward providing international protection for the Palestinian people and confronting Israeli policies that violate international law.
Bahrain also reiterated its firm rejection of the Israeli settlements, “which is in violation of international law and resolutions of international legitimacy, especially Security Council Resolution 2334 issued in 2016 to stop settlement in the occupied Palestinian territories in 1967, including East Jerusalem.”
Bahrain’s foreign ministry said that the construction of settlements carries serious repercussions that would hinder efforts to reach a just and comprehensive peace in the region based on a two-state solution.
Meanwhile, the Arab League will hold an emergency meeting of foreign ministers on Monday to discuss Washington’s change of position, Egypt’s state news agency MENA said on Wednesday.