Iran has warned China it could cancel a much-delayed $5-billion offshore gas exploration contract to develop South Pars field in the Persian Gulf, Iran’s oil ministry announced on Monday.
“There is a possibility of cancelling the contract signed in 2009 to develop the South Pars gas field -- which holds around eight percent of the world's gas reserves,” said oil ministry spokesman Alireza Nikzad. (Mehr News Agency, 24 December)
South Pars, a huge offshore natural gas field shared between Iran and Qatar, holds one of the world’s largest reserves of natural gas. China National Petroleum Corporation (CNPC), China’s largest oil and gas producer and supplier, was contracted for the project.
Iran has accused China in the past of failing to fulfill its commitments and delaying its contractual obligations. It suspended a $16-billion contract with China last year for the North Pars gas field.
“The Chinese side has stated it is not inclined to be part of the project's (South Pars) development,” citing the “high risk” involved in offshore exploration, Nikzad added.
Major Western companies that had been operating in South Pars, among them France's Total and Anglo-Dutch Shell, withdrew from Iran between 2007 and 2010 after international sanctions were imposed over Iran’s controversial nuclear program.
File photo: Land-based facilities at Assaluyeh, Iran, closest land pint to South Pars gas field. (IRNA)