Sinopec, CNPC Procrastination Draws NIOC Ultimatum

Sinopec, CNPC Procrastination Draws NIOC UltimatumSinopec, CNPC Procrastination Draws NIOC Ultimatum

Although oil output from Yadavaran and North Azadegan fields shared with Iraq can increase by 85,000 and 75,000 barrels per day respectively, Chinese state-owned energy giant Sinopec Group and China National Petroleum Corporation have postponed plans to develop the oilfields.  

"CNPC and Sinopec were presented with an ultimatum by the National Iranian Oil Company due to their procrastination to provide NIOC with much-needed technical details and schedule to develop the second phase of the oilfields," Abdolreza Haji-Hosseinnejad, managing director of Petroleum Engineering and Development Company, told Mehr News Agency.

Commenting on ongoing negotiations with the Chinese giants, the official added that NIOC has devised plans to put the proposal to develop the fields out to international tender based on the new Iran Petroleum Contract terms unless the Chinese present their action plan by the end of May.

According to Haji-Hosseinnejad, Chinese companies have shown interest in developing the fields, yet they claim that North Azadegan's Phase II development plan information is not complete in spite of the fact that NIOC has already provided them with the information of both the field and neighboring fields like Sohrab I and II.

Pointing to the fact that CNPC has not dispatched any experts to the field yet, he noted that not only is CNPC not willing to comply with Iran's conditions, but also its experts have rejected the possibility of extracting 75,000 bpd from the field.    

Elaborating on conditions to develop the fields, Haji-Hosseinnejad said apart from the costs, the Chinese companies should agree to recruit first class contractors and Iranian technical consultants should play a role in the designing process.

West Karun, Iran's top priority for raising crude production in the fight for winning back market share, is located in the oil-rich Khuzestan Province and  includes Yaran and Mansouri fields as well as Yadavaran, North and South Azadegan joint fields with Iraq.

The official had already announced that the Japanese Marubeni intends to work in the processing units of South Azadegan and in the oilfields of Kish Island.

South Azadegan was one of the projects introduced to foreign contractors under the new Iran Petroleum Contract in an international conference held last year in Tehran.

Under IPC terms, foreign contractors have to choose an Iranian partner to undertake a project in Iran’s oil and gas industry. The Research Institute of Petroleum Industry has been host to representatives of many international oil companies, including Total, in recent months.

According to speculations, the French company and the Iranian institute are likely to cooperate in developing the second phase of South Azadegan.