China National Petroleum Corp. (CNPC) has pulled out of a development contract for Iran’s offshore field South Pars Phase 11 (SP11), Iranian oil minister Bijan Zanganeh said, leaving local state firm PetroPars to develop the project alone.
Recently increasing U.S. pressure on Iran, following its withdrawal from the nuclear deal and renewed sanctions on Tehran has scared away foreign investors from doing business in the country.
Last year, China’s National Petroleum Corp (CNPC) replaced French oil company Total as the operator of Phase 11 project at South Pars gas field after the French company ended its participation rather than violate U.S. sanctions.
But late last year, CNPC also responded to U.S. pressure and suspended investment in the field.
“China’s CNPC has totally pulled out of the South Pars Phase 11 development and Iran’s Petropars company will carry out the job,” SHANA quoted Zanganeh as saying.
Iran has the world’s second-largest reserves of natural gas, but it has not yet become a major exporter because of international sanctions imposed on the country for decades.
Zanganeh said “by the end of the this [Iranian calendar] year (to March 20, 2020), the first jacket will be installed in the phase for a platform with 500 mcf/d of gas production capacity,” according to Shana news agency.
Development of the Phase 11 is expected to begin soon.
“Fortunately, the projects in oil and gas fields are progressing well despite the sanctions and this progress is very vivid in South Pars,” he said.
Additionally, Zangeneh said that Phase 14 project of the South Pars gas field would come online during next Iranian calendar year which starts on March 21, 2020.