Iran, China set to sign major oil deal: minister

TEHERAN - Iran and China’s Sinopec could, as early as Sunday, sign a long-awaited final multi-billion-dollar agreement for the development of the Yadavaran onshore oilfield, the Iranian oil minister said.

By (AFP)

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Published: Sun 9 Dec 2007, 4:41 PM

Last updated: Sat 4 Apr 2015, 9:35 PM

‘Iran could probably sign a contract this evening with China’s Sinopec to develop Yadavaran,’ Gholam Hossein Nozari told reporters on the sidelines of an oil conference.

‘If not today, it will be in two weeks’ time. We are still in talks,’ the oil minister said.

In late October 2004, Iran and Sinopec inked an initial agreement to develop Yadavaran in southwestern Iran, which is estimated to hold more than three billion barrels of recoverable crude.

Based on that memorandum of understanding, China was to have a 51-percent share in the project. But Nozari refused to disclose the final financial details.

The agreement also involves China’s purchase of an annual 10 million tons of Iranian liquefied natural gas for 25 years, beginning in 2009.

Iran and China have significant economic ties and Beijing is the second largest importer of Iranian goods after Japan.

China is a veto-wielding permanent member of the UN Security Council and has until now been reluctant to support fully a US-led drive to impose a third set of UN sanctions against Teheran because of its nuclear programme.

The United States has been pressuring European and Asian countries to cut their business ties with Iran as another lever to exert pressure on the Islamic republic in the atomic standoff.

The Iran-China talks had been long held up by disagreements on the terms of the Yadavaran deal, most notably involving the rate of return proposed by Sinopec.

Nozari said earlier this year that Iran sought a lower rate of return in the investment to be made by China, which had asked for 15 percent.

If sealed based on the initial agreement, the deal would mark one of the biggest foreign contracts ever for Iran, which holds the world’s second-largest oil and gas reserves and is seeking development of its oil fields.

Teheran has warned it will start major oil and gas projects without foreign investment if international firms do not speed up the completion of negotiations in projects for which agreements were signed a few years ago.

Iran has already started work to exploit certain wells at the Yadavaran and Azadegan oil fields before major international deals are signed, in a bid to retain its position as the OPEC number-two oil exporter.

The country’s economy is also heavily dependent on oil money which accounts for more than 70 percent of government income.

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