Chinese Major Explores Avenues for Cooperation

The National Iranian Oil Company held talks on boosting collaboration with the China Petroleum and Chemical Corporation (Sinopec) in a meeting in Tehran Sunday.

Ali Kardor, the NIOC chief, said on the sidelines of the meeting that Tehran wants secure oil and gas deals with internationals, including the Chinese companies, under a new model of contracts, dubbed as Iran Petroleum Contract, Shana reported. “NIOC priority is deals under the new system of contracts. Boosting the rate of recovery from oil and gas fields and transfer of technology are indeed on the top of NIOC priority list,” Kardor told the visiting Chinese.

He recalled that the IPC entails an extended 20-year period for exploration and production. IPC is designed to supersede the buyback model which was the dominant contractual framework in Iran for nearly two decades. Sinopec has signed an agreement to recondition the Abadan Oil Refinery – Iran’s oldest refinery which was once among the world’s largest oil processing facilities. 

Sinopec, which is China’s largest oil refining and petrochemical company, is also seeking a role in developing Iran’s oil and gas fields, particularly the Yadavaran Oilfield in Khuzestan  near the border with Iraq.

Sinopec signed a contract in 2008 to develop the first phase of Yadavaran within three years. But the project faced a series of setbacks after tighter international financial and trade restrictions were imposed in 2011 and 2012 against Tehran over its nuclear program. In the middle of last year, Iranian energy officials signaled that they are open to developing the second phase of Yadavaran field in collaboration with Sinopec. 

However Kardor made it clear in December that the past collaborations of Chinese firms in Iran should not be interpreted as a prerogative, asserting that “the Chinese should participate in oil tenders alongside other international majors”. The senior official reiterated on Sunday that Sinopec is welcome to bid in the coming oil tenders, including the first tender which is planned to be held for the giant South Azadegan oilfield in the coming weeks.

Wang Yupu, Sinopec’s chairman of the board, said his company has advanced technology for exploration and production as well as the refining industry and petrochemicals. “Sinopec supports Iran’s efforts to acquire new technologies as well as the expertise to develop and manage oilfields,” the official was quoted as saying.