Iran Warns Largest Chinese Oil Company of Losing Its $4.7 Billion Contract
CNPC, China's biggest state oil and gas group, has been warned by Iran to speed up work at the giant South Pars natural gas field or risk losing the multi-billion-dollar deal.
Ahmad Qalehbani, deputy minister of oil, told reporters in Tehran that the Chinese are delaying development work on the phase 11 of the South Pars gas field, phases. Qalehbani said as a result of the delays, CNPC is on the verge of losing its contracts to Iranian firms [Mehr News Agency, 2 September]. The CNPC contract was signed in 2010 and is worth $4.7 billion.
China’s second largest oil and gas company, the Sinopec Group, has also delayed the start date of the $2 billion Yasavaran oil field development. In late 2010, CNOOC, China’s third largest oil company pulled its team from North Pars gas venture.
The behavior of China’s three largest oil and gas companies cannot possibly be coincidental and must reflect the current strategy of the Chinese leadership toward Iran. Even though China had recently accelerated its purchase of the Iranian crude, but it appears to be hesitant to start or complete development work in Iran’s oil and gas fields. This hesitancy is a direct result of China’s eagerness not to challenge or offend the US and its sanctions against foreign investments in Iranian oil and gas sector. The crude oil purchase, however, is not subject to those sanctions and hence China’s willingness to increase its purchases.
Loss of Chinese largest firms as investors in developing oil and gas fields in Iran could cause serious problems for the country’s oil industry, especially considering that not long ago China was probably the last major economy left that was willing to ignore US sanctions on investments.
15 comments:
Well I do declare !
What a surprise the Chinese are stabbing the theocracy in the back!
They must know something of some impending disaster that is going to befall upon the theocratic regime.
NO EAST NO WEST !
That is the theocracies slogan.
Now let Iran sell oil to itself and be truly independent then !!
The Chinese are under pressure by the US to pull out or else!!!
One by one these firms will be vacating these development projects. Even if China did not care, these oil companies which tend to be autonomous, get a large share of technology/expertise from Western countries and therefore cannot afford to be sanctioned.
There we go. Another ammunition for the regime to shout about "sanctions have no effect".
Unfortunately there is this naive and misguided assumption that IRG and its associated companies are there to deliver these projects if foreign firms vacate. Most of the individuals in this forum are familiar with technology and realise that to develop a serious infra-structure for such things will require years of investment, R&D and expert resource. Indeed in the world there are few world class companies that have the know how, technology and money to see these projects through and neither Chinese or Japanese come near. Even these companies have to get advise and consultancy from Western countries.
Case in point the status of Iran’s car industry is an example. Iran’s car industry started in 1960s by Khayami brothers that established Iran Khodro as a private venture. After the revolution and the turmoil that followed, all these companies were nationalised and the result is that despite this industry employing hundreds of thousand of people today, it has only managed to produce outdated copies of French or South Korean cars and they are short of international standards when it comes to emission etc.
So I think this is going to be another nail in the coffin of this wretched regime that has miss-managed the country for so many years. For those who think otherwise, my suggestion is to put their money where their mouth is and take a trip to Iran and see for themselves the mess the regime has created.
"Loss of Chinese largest firms as investors in developing oil and gas fields in Iran could cause serious problems for the country’s oil industry"
Nader that's like me saying, "The rise of super-intelligent apes could cause serious problems for the human species".
Both possibilities only exists in the realms of fevered science fiction. Let's be serious here please.
As long as China (and others) are buying Iranian natural gas and crude oil in large volumes, Iranians always will have plenty of funds to finance development of their oil and gas fields themselves.
It would be highly interesting to see what happened if USA and Europe would start to sanction purchases of Iranian natural gas and crude oil, too.
In my view, such a move would immediately result in a total collapse of the whole sanctions regime.
that's right, the Chinese government, without public fanfare, has decided to back away from aiding Iran.
the Iranian government has succeeded in isolating itself.
More evidence for self sufficiency and improvement and advances in industrial technologies. But when Oil Engineers get paid 50% to several hundred percents higher in the Persian Gulf Region than Iran, with debilitating inside-politics that affect all promotion policies inside the NIOC then there is no question why self sufficiency remains a distant dream for Iran oil and gas industry.
This should be good news for the Iran haters out there..Haven't we heard this before?
They sanctioned Iran's importation of gasoline hoping that will incite people to rise against their government.That didn't work and Iran now exports the very product they sanctioned. China's under a lot of pressure to cancel deals they've made with Iran for access to US markets..Of course they'll choose the US over Iran..Why not?
The US have China by balls at moment as they can easily devalue China's massive dollar holdings by simply printing more dollars. That's why the Chinese can't stand up to the US too much..Like a financial mutual assure destruction..
All is not what it seems though. The Chinese will still assist Iran technologically behind the scene without drawing too much attention from the US..If Iran can't get enough of the stuff from the ground, it means the Chinese can't get enough to power their economy. The Chinese will be stupid to put all their energy(eggs) in one basket in a world where there's so much uncertainties.
The question people fail to ask is the amount of political capital the US has invested just to get the Chinese to "sort of" do this. What did they have to give or WHAT GIVES??? The Chinese knowing what they are certainly don't do charity.
Of course, for the simpletons, it a big hooray for their "Iran's isolated" mantra but hasn't that been the case since the fall of the Shah? And Iran still lives..Just another day in international politics..Tomorrow brings new realities..Move on...
The show is nearly over and it's curtain time !
To anon September 2, 2011 3:39 PM
What a load of bollox!
By producing sub-standard gazoline Iran has only managed to choke its cities to death. The number of cases of respiratory diseases is rising alarmingly and this bozo is sitting in the comfort of Western Country babbling about whether America is going to print dollar to devalue Chinese reserves. Obviously your knowledge of Economics is as much as your understanding of Chinese language. Printing money is called Quantitative Easing and no rational country will do it lightly let alone USA that is holding 30% of World wealth.
According to this clamhead everyone that obviously sees the forthcoming issues must be Iran hater or simple minded (well he must be very clever). I am surprised this gadazadeh has not thrown in the usual Israel/USA spanner in. He is reading Press TV, he thinks all is rosy in Iran and everyone must be a Shah parast if they state the obvious. Well what a tosser.
Regrettably the reality is (by the number of comments in this section), that whatever means USA has managed to do it (bribery, direct threat, otherwise), sanctions are working. I guess Chinese will be paying in cheap rubbish for the oil they get because they cannot easily transfer money into Iran. However, they can push trash into Iranian consumer shops via Turkey. The situation of availability of hard currency is so acute that in some cases even certain medicine cannot be found. Banks fair no better. They are all under sanctions and those who make money are sarrafs that charge exuberant rates for currency exchange.
Finally this guy states:
“And Iran still lives..Just another day in international politics..Tomorrow brings new realities..Move on...
Iran does not live. It is just about alive in intensive care, thanks to brainwashed gadazadeh like you who thinks that Islamic republic is the right choice. Shah dis not fare better but these guys are taking the piss!
I think the investment problem in oil sector can be solved easily that needs to stop monthly cash handout progrme.it will better to distribute public sector's shares among iranians.I think the investment problem in oil sector can be solved easily that needs to stop monthly cash handout progrme.it will better to distribute public sector's shares among iranians.
In my opinion we need the Chinese much more than they need us, but we can get all our oil and gas technology needs met from China's good friend Hugo Chavez!
Look how great Hugo has increased oil and gas output since he nationalized his countries oil & gas sector, he got much help from the Chinese too!
Go Iran Go!!!
Nouri
---".....it a big hooray for their "Iran's isolated" mantra but hasn't that been the case since the fall of the Shah?"---
no, that has not been the case since the fall of the Shah. the United States, after Iran released the Americans that they had kidnapped, during the early days of the Reagan administration , sought to repair relations with Iran.
Reagan, fool that he was, thought that be could have a non-hostile relationship with an Iran ruled by Rouhollah Khomeini. he sent Iranians gifts and assurances and repeatedly told the American people that there were "moderates" in the Iranian government with which the US could find common ground.
The Iranian government was pleased to be dealing with a fool, accepted the weapons that Reagan sent, and sent Reagan a message in the form of a tape of the pre-execution torture of one of the hostages taken in Lebanon that they told Reagan would be returned alive.
After that, even an amiable idiot such as Reagan figured out that the theocracy wasn't inclined to be friendly toward the US and that the "moderates" weren't really running anything.
Since then, the US hasn't been looking to send Iran any more weapons or gifts.
To anon September 2, 2011 3:39 PM
You make me laugh with the degree of your sophistication. Of course everyone else is assumed to be Iran hater and simple minded.
Back to your babbles shown in quotes below
“They sanctioned Iran's importation of gasoline.. That didn't work and Iran now exports..”
I suggest that rather than sitting in an armchair in a Western city and talk about what Iran manages to produce or not, you should put your money where your mouth is and take a trip to Iran. You will see that the so called sub-standard gasoline produced locally (in a hurry) is choking Iranian cities to death.
“The US have China by balls at moment as they can easily devalue China's massive dollar holdings by simply printing more dollars….”
That is called Quantitative Easing (QE) with serious implication for any economy least for the World’s largest economy. So how the US is going to undermine its own economy and others for the sake of Chinese. Get real.
Third World is the only place China can make in roads for simple reason that its technology is not sophisticated enough to be used in the West, because their technology is years behind. That is the same reason that Chinese companies have to get out from Iran. There are few world class oil and gas exploration companies and these emerging market companies depend heavily on specialist technology and consultancy on their Western counterpart and the loss of such access will be disastrous for them. It is a simple matter of cost/benefit analysis. They have worked that one out easily. Take it from a simpleton!
“The question people fail to ask is the amount of political capital the US has invested just to get the Chinese to "sort of" do this. What did they have to give or WHAT GIVES??? The Chinese knowing what they are certainly don't do charity….”
The answer is this is not even taken at government level. Couple of meeting with Chinese Companies executives will remind them of their heavy dependence on US technology. That would be good enough.
I am always amazed at the amount of naïve assumptions that these so called regime supports throw as if everyone else is as simple as them. Any discussion ends up with the others being labelled as “Iran hater” or stooge of US/Israel (thank god this one did not throw this as well). Most people here are familiar with technology and the assumption is that they did not get their degree from Imam Zaman University. Every technologist knows that to gain experience and expertise in a certain technology will take years for a country. I guess as usual the story is that a consortium from IRGC Ltd will take over these projects! OK first where were these companies in the first place? Secondly judging by the state of Iranian auto industry (that after 40 years can only produce outdated copies of French and South Korean models), how are these local companies are going to get the technology and management expertise overnight to complete these projects? Thirdly, Iran has said over at least the past fiver years that it can complete Bushehr reactor on its own. But where is it now after 10 years of delay.
The answer is regrettably Iran is very isolated practically cut off from the World community and access to high level technology and exchange of technology. As I said before take a trip to Iran. I was there three weeks ago. You will be amazed at the sophistication of products available. Television and house hold products from LG and Samsung. Staplers from Vietnam! Rather than investing higher oil revenues in infrastructure (oil and gas) or improve the quality of Iranian products (emissions from cars etc) , this regime is content with flooding the shops with cheap imported rubbish. But that is drying up as well. Sanctions are impacting hard currency availability. Even you cannot find some medicine. So here we are. You, Press TV and simpleton Iran haters!
Dear Nouri,
you're quite incorrect.
Chavez has managed to mis-manage Venezuela's oil industry and has not increased oil output at all. Venezuela's oil output has DECREASED by about a third ....and the profit from the decreased output is down by more than a third because Chavez's stooges are selling the oil on disadvantageous terms.
Chavez himself is on the way out and none too soon.
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