China, Iran on the brink of huge oil deal

http://economictimes.indiatimes.com/...ow/1419574.cms

(Gold9472: Now how can Iran concern themselves with oil if the U.S. and Israel are blasting them to hell? China won't like that. They NEED the oil.)

ELAINE KURTENBACH
AP[ SATURDAY, FEBRUARY 18, 2006 02:54:47 AM]

SHANGHAI :China and Iran are close to setting up plans to develop Iran’s Yadavaran oil field, according to published reports, in a multi-billion dollar deal that comes as Tehran faces the prospect of sanctions over its nuclear program. The deal is said to be worth about $100bn.

According to Caijing, a respected financial magazine, a Chinese government delegation is due to visit Iran as early as March ’06 to formally sign an agreement allowing China Petrochemical (Sinopec), to develop Yadavaran. The Wall Street Journal also reported in Friday’s editions that the two sides are trying to conclude the deal in coming weeks before potential sanctions are imposed on Iran for its nuclear ambitions. The report cited unnamed Iranian oil ministry officials familiar with the talks. The deal would complete a memorandum of understanding signed in ’04.

In exchange for developing Yadavaran, one of Iran’s largest onshore oil fields, China would agree to buy 10m tons a year of liquefied natural gas for 25 years, beginning in ’09, the Caijing report said, citing Sinopec board member Mou Shuling. Chinese and Iranian officials in Beijing said they could not confirm the report.

Staff at Iran’s embassy in Beijing said they were aware of the report but had not heard Mou’s remarks, which Caijing said were made at a recent embassy event. A written statement from the Iranian Embassy noted that the two countries have been working together in various energy fields.

“following the rule of mutual benefits and respect in all bilateral co-operation.” The Caijing report said Chinese and Iranian officials met in December last for talks on the project.According to the published report, Sinopec would hold a 51% stake in the Yadavaran project, with India’s ONGC taking 29%. The remainder would go to Iranian companies and possibly to Royal Dutch Shell PLC, which has also expressed interest, it said.

The report also said that there was some disagreement over intended capacity, with Iran asking China to agree to daily output of 3,00,000 barrels of oil, while Sinopec preferred to set a target of 1,80,000 to avoid excess production.

China, seeking oil and gas to fuel its booming economy amid stagnant production at home, has been snapping up energy resources in places as far flung as Venezuela, Kazakhstan, Nigeria and Australia.