Beijing close to deal on second Iranian gas field

[HBendor]

Beijing close to deal on second Iranian gas field
Associated Press - 13 January, 2007
www.gulfinthemedia.com/index.p.....mp;lang=en

A second Chinese oil company is close to signing a memorandum of
understanding to invest $ 3.6 billion (2.8 billion euros) in an Iranian gas
field amid US pressure for Beijing to scrap another similar deal, a news
report said Friday. State-owned China National Petroleum Corp would invest
in Iran's South Pars gas field under the agreement, Dow Jones Newswires
said, citing an unidentified Chinese official. An employee who answered the
phone at CNPC's press office in Beijing and refused to give his name said he
could not confirm the report.

Washington is pressing Beijing to reconsider a deal by a state-owned oil
company to invest in another Iranian gas field, citing efforts to sanction
Tehran over its nuclear program. That deal calls for China National Offshore
Oil Co to invest $ 16 billion (12.5 billion euros) in the Northern Pars gas
field. A Chinese Foreign Ministry spokes-man this week said Beijing
considers such commercial ties with Iran to be legitimate and urged
Washington not to interfere.

The controversy highlights the conflict between Beijing's campaign to secure
energy supplies for its booming economy and the foreign policy goals of the
United States and other diplomatic partners. Chinese President Hu Jintao
last week told Iran's nuclear envoy that Tehran should respond to UN
concerns about its nuclear program but also called for a negotiated
settlement of the dispute. China has invested billions of dollars to secure
access to oil and gas sources in areas as farflung as Latin America and
Africa, doing business with governments such as Sudan that are isolated
internationally.

CNPC is China's biggest oil company by assets.Its memorandum of
understanding with Iran's oil ministry would involve a pledge to spend $ 1.8
billion (1.4 billion euros) on exploration and production in the South Pars
field and a similar sum on building a liquefied natural gas plant, Dow Jones
reported. The field has estimated reserves of 370 billion cubic meters (13
trillion cubic feet) of natural gas, Dow Jones said. CNPC is in talks with
Norwegian oil company Statoil ASA about joining the project, the report
said, citing another CNPC official, who also was not identified. China's No
2 oil company, Sinopec Group, is in talks with Iran on a 25-year gas
contract and development of Iran's Yadavaran oilfield.



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