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Tsvetana Paraskova

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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Iran: Chinese CNPC Replaces Total In South Pars Gas Project

gas storage

State-controlled China National Petroleum Corporation (CNPC) is replacing French oil and gas major Total in Iran’s multi-billion-dollar South Pars gas project, Iran’s semi-official news agency ICANA quoted Oil Minister Bijan Zanganeh as saying.

Last year, Total became the first supermajor to return to Iran after the previous sanctions were lifted, with the multi-billion-dollar South Pars 11 gas development project.

But after the U.S. withdrawal from the Iran nuclear deal, Total said in May that it would not be in a position to continue the South Pars 11 gas project and would have to unwind all related operations before November 4, 2018, “unless Total is granted a specific project waiver by the U.S. authorities with the support of the French and European authorities. This project waiver should include protection of the Company from any secondary sanction as per US legislation.”

“Total has always been clear that it cannot afford to be exposed to any secondary sanction, which might include the loss of financing in dollars by US banks for its worldwide operations,” the French company said a week after the U.S. withdrawal from the Iran deal.

In early June, Total’s chief executive Patrick Pouyanné said that the company’s chances of securing a waiver were “very slim.”

In August, Iran said that Total had officially left Iran due to the threat of secondary sanctions from the United States if it were to continue to do business with Tehran.

Now Oil Minister Zanganeh said that CNPC had officially replaced the French major in the South Pars 11 project. The Chinese state firm, however, has not started work on the project yet, as Iran has yet to hold talks with CNPC about when operations will begin, the minister added.

Before Total quit Iran, the French company had 50.1 percent in the project and was its operator, while CNPC owned 30 percent, and Petropars—a wholly owned subsidiary of the National Iranian Oil Company (NIOC)—held the remaining 19.9 percent.  

By Tsvetana Paraskova for Oilprice.com

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  • Mamdouh G Salameh on November 27 2018 said:
    China is not only buying Iranian crude in increasing volumes but it is also investing heavily in Iran’s oil and gas industry and thus openly defying US sanctions on Iran.

    Moreover, the whole US sanction regime is at the mercy of China and the petro-yuan. China could singlehandedly nullify US sanctions by buying the entire Iranian crude oil exports estimated at 2.2 million barrels a day (mbd) and paying for them in petro-yuan. For the time being, China is slowly increasing its purchases of Iranian crude. But if no breakthrough is achieved over the escalating US trade war on China during the coming meeting this month between President Trump and the Chinese leader, you can bet that China will just do exactly that in retaliation against the US.

    Now State-controlled China National Petroleum Corporation (CNPC) will be replacing French oil and gas major Total in Iran’s multi-billion-dollar South Pars gas project according to Iran’s semi-official news agency ICANA quoting Iran’s oil minister Bijan Zanganeh as saying.

    Total which had 50.1% in the project and was its operator decided to quit Iran saying it cannot afford to be exposed to any secondary US sanctions, which might include the loss of financing in dollars by US banks for its worldwide operations.

    CNPC owns a 30% share in South Pars has yet to decide whether to buy the entire share of Total or to share it with Petropars, a wholly owned subsidiary of the National Iranian Oil Company (NIOC) which holds the remaining 19.9%.

    Against a battle of wills between China and the US in the escalating trade war between them, China will do its utmost along with Russia to undermine US sanctions against Iran in every which way.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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