Iran may award North Azadegan to China

Iran may award phase two of the North Azadegan oilfield to China for development, Minister of Petroleum Bijan Zangeneh says.

The China National Petroleum Corporation (CNPC) and Iran’s PEDEC have already signed an initial agreement to produce 25,000 barrels a day (bpd) from the field in the second phase, Iranian officials have said.

Under the contract, the Chinese must submit their proposal for implementation of the second phase to Ministry of Petroleum for examination and approval,” Zangeneh said in Tehran.

CNPC also operated the first development phase of North Azadegan and was expected to begin production around October last year with 75,000 bpd.

In 2013, Iran cancelled a $2.5 billion contract to extract oil from the South Azadegan field (pictured) and another deal to develop Phase 11 of the South Pars natural gas field after CNPC spent four years just to start the projects.

The Chinese are said to have accelerated their operations in a bid to appease Iran as they see the specter of being undercut by international energy giants for new projects.

Almost all the projects awarded to the Chinese are beset by either repeated delays or other contractual problems.

China’s energy companies were reportedly instructed in 2010 to slow or stop work in Iran because of pressures from the US which has a sanctions regime in place against Tehran.

State-run Sinopec Group and China National Petroleum Corporation (CNPC) had been reported to begin producing 160,000 barrels a day of oil from South Azadegan and Yadavaran in southwestern Iran from October.

Sinopec officials have said they expected the first phase of the Yadavaran oilfield to yield 85,000 bpd.

Yadavaran, which Iran shares with Iraq’s Sinbad, was awarded to Sinopec about nine years ago in a $2 billion deal to operate the first phase in July 2014 and raise recovery to 200,000 bpd in the second phase.

(Source: PEDEC )

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