Sunday, March 13, 2011

China Wins Iran Oil Contracts

China was awarded contracts to develop Iran’s North and South Azadegan oilfields. The Iranian ministry of oil announcing the news today in Tehran did not disclose the name of the Chinese state-owned company who has won the contracts. The Chinese investment to develop the giant fields is estimates to exceed $6 billion.

The Deputy Oil Minister Ahmad Qalebani told reporters that no domestic company has the required capital to undertake the development work.

“Development of these two giant oilfields requires investments more than $6 billion and the possibility of procuring such an amount by a domestic contractor does not exist,” Qalebani said [Mehr News Agency, 13 March].

Iran, unlike many oil-producing countries, has not developed an independent fund from its oil revenues to reinvest in the existing and new oilfields. The investment budget for any development work in the industry is part of the government’s general capital expenditure budget and usually has not been given the top priority it needs to maintain and expand the country’s premier industry.


Anonymous said...

China and Iran cooperation is increasing on many issues. They are even more aligned on most global issues as China asserts itself as the predominant world power and as US bankrupt warmongering and its internal socio-economic implosion relagates in into a basketcase.US economy simply can not recover now as power has shifted east. China's military will surpass US in about a decade and its military technology has taken quantum leaps as its new stealth fighters and new carrier sinking missilles attest to.

China also views Iran as a rising and dependable power with extensive influence on its neighbours, particularly the Muslim world and its the Persian influenced Central Asian petrolistans. In a recent visit to Iran, the Chinese Foreign Minister paid glowing accolades to Iran and its stability, considering what they see in the neighbourhood that is totally destabilized thanks to US/Zionist "democracy game".

China is now quite concerned over the fate of Saudi Arabia and the Persian Gulf petro-pimp sheikhs.

It is also interesting to note that the Indian national security chief was in Tehran a couple of weeks ago and also paid glowing tributes to Iran and the historical links with India and their desire to improve ties further with Iran, a RISING POWER in its own right.

China's energy needs will only grow and with the fossil fuel age soon reaching depletion, China's energy cooperation with Iran will only grow. These ties will also have strengthened geo-strategic and military dimensions. Iran's control of the Persian Gulf and southern trading route access for China and central Asia will be a key determining factor.

Iran is rapidly upgrading the rail, sea and air infrastructure in Sistan and expanding Chah-Bahar port and industrial zone including both tanker based and oil storage capacity outside of Hormuz straits. This is all good for both resurgent powers and improves access to India as well. Iran-China trade in real terms is already in excess of $60 Billion a year, and that does not include many defence related priority projects and scientific cooperation. Trade with Turkish brothers is in the $20 billion range and growing rapidly. Growing trade with India will soon be in that range. The idea of an underwater gas and oil pipeline to Indian Gujrat coast really needs to be expedited.

Iran's prime location and stable government and security has contributed vastly to its economic growth. The securing of the eastern flank on the unstable Pakistani/Baluchistan border is the cornerstone of Iran's security and well being.

I believe there will me more Asian cooperation rather than naive and wishful US efforts to set China against India and vice-versa. The ignorance of US policies and their juvenile nature knows no bounds.

Anonymous said...

It is not that Chinese have won any tender or there was real competition. The fact is that Azadegan oilfield has been on the card for more than 10 years and anyone including Japanese had a go at it and because of sanctions they have all withrawn! So there we have it it is either Chinese or some domestic company affiliated to the Guards. Well neither of them have the technology and know how for this substantial work. It is a pretty sad case that after so many years there is only one willing partner.

This shows the total isolation of Iran in the commercial community. Some will call this independence. There is no independence. It shows full dependency on the buyer in this case Chinese. Even no other majors outside of US and Western Europe bothered to show any interest or actual commitment. The story is repeated in other sectors of Iranian economy including Gas fields.

Anonymous said...

Anon,March 13, 2011 8:58 PM.."This shows the total isolation of Iran in the commercial community"..Now there's something wrong with that bold but vague assertion there..

First of,the country you've mentioned, Japan,didn't just abandon their projects out of their own will or because they just woke up one morning and thought it's happy to do so.You have to remember the Japanese don't have/control their foreign policy regarding the ME.They make their policies to suite that of their masters in Washington DC.The US even threatened Toyota to cancel the sale of their cars to Iran.And Toyota, fearing their masters in DC hurriedly complied for fear of losing their US market, only to beset by withdrawal of millions of cars due to mechanical problems.Can you imagine, Toyota???Now, how that's connected to Iran's nuclear issue is beyond common

Anyway,It is fair to say that most countries that supported Washington's sanctions were either threatened,blackmailed or both out of the Iranian oil market with promises of other deals in some Arab countries.

With the situation the Middle East, as it stands, i doubt they're happy now with the decisions they made back then.Many western oil companies are said to lose billions of dollars with the uprisings in the Arab world. Many western companies will like to invest in Iran but are scared to do so out of fear of the US..

If Iran's independence mean they'll be "commercially isolated" as you've said, I'll rather they stay independent.

Just think of it this way, if Iran's oil industry is sanctioned so the have no means of extracting oil or gas, the oil stays underground for future use or generations.Instead of it being plundered by big business...

Don't blame the Chinese.They make their policy based on DOMESTIC NEEDS(call it pragmatism) and not some stupid Washington powers play politics in the Middle East.

Anonymous said...

Actually both China and Iran have the technology. Iran lacks the money because they are undertaking major non-oil infrastructure projects. China has the money and so they won the contract.

I'd rather China won than some American or European company that has political motives. In most cases, they charge more anyway and are reluctant to transfer technology.

Pablo said...


It is my understanding that China can do this under the UN Security Resolution passed last year, since that security resolution does not bar energy relations with Iran. It is also my understanding that many countries around the world have passed their own sanctions against Iran that are more stringent. Does this not violate, for example, the American sanctions against any company that trades with Iran? Is so, will the United States sanction China (probably not, right)? What about the EU and some of the other countries that passed their own laws? Will there be any backlash to China's developing these oil fields?

Nader Uskowi said...

Pablo, the text of the agreement is not available. Iran’s Oil agreements in Iran are classified and the government does not publicly report on any specifics. For example, when does this agreement go into effect, we don’t know. Until then, there are no violations of the US sanctions; even then it depends on the role played by the unnamed Chinese company. But on the face of it, this agreement if executed will subject that company to US sanctions.

On the question of isolation and independence raised by anons: I believe the old models of living in isolation but being proud of independence do not entirely work in the current era when all parts of this globe are so closely linked to each other. Isolation is impractical and as a policy is more suicidal than independent thinking. Countries need to assert their independence through non-isolation routes. There are many countries who are politically independent but enjoy total integration with the global economic system. “We are isolated but independent,” is used as an excuse by the government for their wrong policies creating the isolation.

Anonymous said...


I hope you know that Iran does not choose Isolation but is Isolated because its national interests are seemingly against America's (and more importantly Israels).

Nader Uskowi said...

Isolation does not appear out of the blue, it is the result of many actions directly undertaken by the Islamic Republic or supported by it during these three decades: hostages, flag burnings, death to America slogans (as late as three weeks ago in the Majlis by the representatives themselves), support for or involvement for attacks such as the Marine barracks in Beirut, etc. With regard to Israel, a whole host of policies, starting with non-recognition of the state, discouragement of peace process, constant anti-Israeli talks by senior leaders including statements deemed threatening to its existence, etc. What do you expect?

Please note I am discussing Israeli or US policies here, they have their own share of problems contributing to worsening relations with Iran, like coolness to a grand bargain proposal after the Iraqi invasion. But please note Iran can not complain of isolation and blame its mismanagement of its own affairs for isolation if it is directly involved in actions that lead to isolation.

Nader Uskowi said...

In the second paragraph above, I meant to say that I was NOT discussing Israeli or US policies here.

Anonymous said...

do you know what Ayatollah khomeini said about isloation ?

as much as they try to isolate us,
we get better.

Anonymous said...

Mr. Nader just hates any progress Iran makes..He'd rather Iran is sanctioned until the beg the Americans for food.In fact it's people like him who promote the west to isolate Iran..I just can't stand self hating Iranian wannabes...Dream on....

Anonymous said...

anon 12:53
One can disagree with mister nader... but you seem to put little effort in discrediting his arguments, let's just call him names and be done with it!

Nader Uskowi said...

non 12:53 PM,

When we discuss policy, we need to distance ourselves from emotions and personal attacks; this type of “debate” does not take us anywhere. Up to now Israel and the US have been blamed for Iran’s isolation, now you are adding my name to the list. Blame anyone and everyone for all the problems the government faces but the government itself, that’s seemingly the motto here. Let me ask a simple question: Has any of the government's policies and actions directly or indirectly contributed to the country's isolation? I’ll be more than happy to debate this point with you.

Anonymous said...

Anon said:

"Mr. Nader just hates any progress Iran makes..He'd rather Iran is sanctioned until the beg the Americans for food.In fact it's people like him who promote the west to isolate Iran..I just can't stand self hating Iranian wannabes...Dream on...."

What a pile of junk. People like you do more damage to Iran than those who look at Iran objectively including a vast majority of respondents in this thread.

So in your world one either has to love this administration (read administration not Iran) or one is Iran/Islam hater enemy number one! In your case anyone who has an opposing view must be either a Zionist, a member of the green movement, an agent of USA, an Islam hater or for that matter anything else. Well according to you guys who see the world from one angle only tolerance and civil behaviour has no value. Since individual like you detest anyone with differing opinion (and pretty good at labelling anyone with opposing views as you have shown clearly), you feel that everybody is against you lot. You guys have no stomach to talk about rampant corruption in Islamic republic, the fact that half f the population live under poverty, an isolated country that has no real friend and regrettably is considered an outcast in international society. Independence does not mean confrontation. The administration spends over $2.8 billions monthly on direct cash (around 34% of the currency earnings handouts) to keep people somehow content. The rest goes to IRGC funded front companies. BTW $6 Billion has gone missing from the oil stabilisation fund which is equivalent to what China is expected to invest in Azadeghan oilfield!

After thirty years of wasting nation's resources, Iran is ending up with a society in which the vast young population have no hope for the future. The female population of Iran have been degraded by this wretched ideology to second class citizens through covering of hair and other restricted practices with vast amount of nation's money spent to police this ridiculous habit. Unable to find any meaningful purpose in life under this ideology, the young people are increasingly turning to drugs. The net effect is that in certain urban population either the vast majority are drug takers or drug dealers. Well that is real progress! The problem is that as you proved if one is brainwashed, then logic has no place. Babbling is norm of the day. So we have an ideology that educates mechanical, superstitious, ahistorical and dogmatic way of life. The regime keeps misleading the people, perpetrate ignorance, deprivation and superstition and try to create hypothetical enemies despite the fact they had no problem shaking hand with Saddam who killed ½ million Iranians!! Unable to improve the life of daily masses the regime can only offer martyrdom and sacrifice as means of attaining salvation. It is ironic that an ancient civilisation like Iran in 21st Century is going through this mess and I guess you call this progress. Dream on

Oil Storage Tanks said...

Simply put, both China and Iran benefit greatly from this agreement. China gets additional income and probably another source of oil. Iran, on the other hand, gets the help it needs to manage its oil resources. How this affects both countries, as well as other states, in the long run remains to be fully seen.

Anonymous said...


Simply put China is the one that benefits from oil contracts with Islamic theocracy.
Because in return China Veto's the West regarding the theocracy's nuclear program in return china receives cheap Iranian oil.Then china resells cheap Iranian oil at actual market prices making huge profit.
Result the Iranian people are the losers and Islamic theocracy wins another day to remain in power with the Chinese laughing all the way to the bank knowing full well that Iran has thoroughly been taken for a ride,thanks to the theocracy.
These oil contracts will be invalid once this theocracy vanishes.