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. 


Iraqi protesters block commercial ports, split capital

Updated 19 November 2019

Iraqi protesters block commercial ports, split capital

  • Iraqi civilians are increasingly relying on boats to ferry them across the Tigris River as ongoing standoffs shut key bridges in Baghdad
  • The Jumhuriya, Sinak and Ahrar bridges connect both sides of the city by passing over the river

BAGHDAD: Anti-government protesters blocked access to a second major commercial port in southern Iraq on Tuesday, as bridge closures effectively split the capital in half, causing citizens to rely on boats for transport to reach the other side of the city.
Since anti-government protests began Oct. 1, at least 320 people have been killed and thousands wounded in Baghdad and the mostly Shiite southern provinces. Demonstrators have taken to the streets in the tens of thousands over what they say is widespread corruption, lack of job opportunities and poor basic services, despite the country’s oil wealth.
Security forces have used live ammunition, tear gas and stun guns to repel protesters, tactics that Secretary of State Mike Pompeo said Monday would be punished with sanctions.
“We will not stand idle while the corrupt officials make the Iraqi people suffer. Today, I am affirming the United States will use our legal authorities to sanction corrupt individuals that are stealing Iraqis’ wealth and those killing and wounding peaceful protesters,” he said in remarks to reporters in Washington.
“Like the Iraqi people taking to the streets today, our sanctions will not discriminate between religious sect or ethnicity,” he added. “They will simply target those who do wrong to the Iraqi people, no matter who they are.”
Over a dozen protesters blocked the main entrance to Khor Al-Zubair port, halting trade activity as oil tankers and other trucks carrying goods were unable to enter or exit. The port imports commercial goods and materials as well as refined oil products.
Crude from Qayara oil field in Ninewa province, in northern Iraq, is also exported from the port.
Khor Al-Zubair is the second largest port in the country. Protesters had burned tires and cut access to the main Gulf commercial port in Umm Qasr on Monday and continued to block roads Tuesday.
Iraqi civilians are increasingly relying on boats to ferry them across the Tigris River as ongoing standoffs between demonstrators and Iraqi security forces on three key bridges has shut main thoroughfares connecting east and west Baghdad.
The Jumhuriya, Sinak and Ahrar bridges, which have been partially occupied by protesters following days of deadly clashes, connect both sides of the city by passing over the Tigris River. The blockages have left Iraqis who must make the daily commute for work, school and other day-to-day activities with no choice but to rely on river boats.
“After the bridges were cut, all the pressure is on us here,” said Hasan Lilo, a boat owner in the capital. “We offer a reasonable transportation means that helps the people.”