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. 


Libyan officials: Airstrike kills 7 workers in Tripoli

Updated 54 sec ago

Libyan officials: Airstrike kills 7 workers in Tripoli

  • Tripoli has been the scene of fighting since April
  • The health ministry said the airstrike took place in the capital’s Wadi el-Rabie neighborhood

CAIRO: An airstrike slammed into a biscuit factory in Libya’s capital, Tripoli, on Monday killing at least seven workers including five foreign nationals and two Libyans, health authorities said.
Tripoli has been the scene of fighting since April between the self-styled Libyan National Army, led by Gen. Khalifa Haftar, and an array of militias loosely allied with the UN-supported but weak government which holds the capital.
The Tripoli-based health ministry said the airstrike took place in the capital’s Wadi el-Rabie neighborhood, south of the city center where fighting has been raging for months.
Malek Merset, a spokesman with the ministry, told The Associated Press that the dead included five workers from Bangladesh, and two Libyan nationals.
The airstrike also wounded at least 33 workers, mostly from Niger and Bangladesh, who were taken to nearby hospitals for urgent treatment, Merset said.
Footage shared online showed wounded people with bandages and blood on their legs on stretchers before being taken by ambulances to hospitals.
Fighting for Tripoli has stalled in recent months, with both sides dug in and shelling one another along the city’s southern reaches. The months of combat have killed hundreds of people and displaced thousands.
Libya has been divided into rival governments, with Tripoli controlling parts of the country’s west, and a rival government in the east aligned with Haftar’s force. Each side is backed by an array of militias and armed groups fighting over resources and territory.
East Libyan authorities said on Sunday a Libyan Airlines aircraft had been seized by officials at the airport in the western city of Misrata. The Tripoli-government controls the airport, and militias seen as its political allies occupy the city.
Ezz Al-Din Al-Mashnoun, a spokesman for Libyan Airlines, said in a statement that the aircraft is the only functioning plane used by the airline in the eastern region.
The passenger jet was undergoing routine maintenance and was due to take off Sunday for the airport in Benghazi.
Hatem Al-Oreibi, a spokesman for the eastern Libyan administration, demanded that the Misrata airport return the plane within hours or “face escalatory measures,” without elaborating.
The seizure of the plane came days after east Libyan authorities had begun stopping any flights coming from Misrata, alleging security reasons.
Misrata airport is the only functioning airport in western Libya. Tripoli-allied militias have used it as an air base during the conflict.
A spokesman for the UN-supported government did not immediately answer calls seeking comment.
The rise in violence this past year threatens to plunge Libya into another bout of violence on the scale of the 2011 conflict that ousted and killed longtime dictator Muammar Qaddafi.