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.