Page 10 - MEOG Week 27

MEOG ProJeCtS & ComPAnIeS MEOG
Iran seeks clarity on CNPC’s South Pars involvement
IrAn
IrANIAN oil minister Bijan Zanganeh said this week that Tehran is looking to clarify China National Petroleum Corp.’s (CNPC) intentions regarding Phase 11 of the South Pars (SP11) gas eld. In a televised interview, he said that a request from CNPC to suspend operations on the project had been rejected. CNPC currently holds an 80.1% stake in the development, with National Iranian Oil Co. (NIOC) subsidiary Pet- ropars holding the remainder.
Zanganeh said that if CNPC does not intend to proceed with SP11 in a timely fashion, then it would have to “pull out of the contract, which if so, its share would be transferred to Iran’s Petropars”.
Despite taking the issue public, Zanganeh professed hope that an amicable resolution could be found, noting that Iran “would not opt for severing ties for foot-dragging in projects. We are seeking alternative solutions”.
CNPC negotiated a 30% stake in the $4.879bn project in July 2017, with French super-major Total taking operatorship of the project and a 50.1% stake and Petropars holding 19.9% under the Integrated Petroleum Contract (IPC) model. SP11’s production target was set at the time to 20.8bn cubic metres per year.
However, Total’s stake was transferred to
CNPC a er the French company announced in May 2018 that it would be winding up operations in Iran owing to pressure from US sanctions.
In February, Zanganeh said that gas produc- tion from the South Pars gas eld was averaging 610mn cubic metres per day, exceeding that of Qatar, which shares the giant o shore eld with Iran.
Unlike Qatar, Iran has been unable to pursue plans for three di erent LNG projects related to the eld due to years of international sanctions. An international agreement on Iran’s nuclear energy program led to the li ing of sanctions in 2015, but e orts to restart the projects were thwarted with the re-imposition of sanctions by the US last year.
NIOC announced early this year that the country’s total recoverable crude oil reserves amount to 160bn barrels, with natural gas reserves estimated at totalling 33.33tn cubic metres. South Pars accounts for around 40% of the gas reserves and around 60% of its gas production.
If CNPC decides to continue to do nothing with the project, Iran will in all likelihood termi- nate the contract, with Zanganeh having alluded to improving domestic capabilities in terms of developing the gas sector.™
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w w w . N E W S B A S E . c o m Week 27 09•July•2019