Chinese oil company CNPC has withdrawn from Iran’s flagship hydrocarbons project in a further blow to the Islamic republic’s economy, which has been hammered by US sanctions. Iran’s oil minister Bijan Namdar Zanganeh told local reporters on Sunday that state-owned CNPC would no longer help develop phase 11 of South Pars, the world’s largest gas field.
He did not clarify when the Chinese group had made its decision or the reason for it. Iranian analysts said CNPC abandoned the project because of US sanctions and concerns over its interests in America, but Iran’s oil ministry said it could not provide further details. The US has imposed punishing sanctions against Iran since President Donald Trump last year withdrew from a 2015 deal intended to curb the Islamic republic’s nuclear ambitions. In recent weeks Washington has stepped up its policy of “maximum pressure” on Iran’s energy industry.
Last month it placed sanctions on two subsidiaries of China’s state backed shipping giant Cosco for their alleged involvement in handling Iranian crude. It was one of the first US actions against a major state-backed Chinese entity. The move sent rates for chartering many oil tankers sharply higher, as international oil traders can no longer use the 40 or so tankers connected to the Cosco subsidiaries without risking falling foul of Washington.
Total of France quit the multi-billion-dollar South Pars scheme last year to escape US penalties. Iran’s quasi private-owned “Petropars Company will be the only one which will continue developn1ent of this phase [of the gas field],” Mr Zanganeh said, according to domestic press. “We wanted to lure foreign investments for this project … and Petropars was supposed to learn from these companies.”