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CNPC signs US$4.7-bln gas deal with Iran, replaces Total

Published: 04 Jun 2009 01:00:03 PST

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Jun. 4, 2009 (China Knowledge) - China National Petroleum Corp (CNPC), the parent company of the nation's largest oil refiner, PetroChina<601857><0857><PTR>, on Wednesday inked a US$4.7-billion contract with Iran for the development of phase 11 of the South Pars gas field in the Gulf, taking the place of France's Total, the second largest oil company in Europe, Iran's IRNA news agency reported.

The news agency said that the deal was signed in Beijing by an Iranian delegation headed by Seifollah Jashnsaz, managing director of the National Iranian Oil Co.

Jashnsaz said that Paris-based Total can continue talks on involvement in the field's downstream sectors.

Total and National Iranian Oil had signed a memorandum of understanding on the development of phase 11 of South Pars, which is the world's largest gas reservoir and is shared by Iran and Qatar. However, no agreement had been reached; the parties were still bargaining over contract terms.

Iran, the world's fifth-biggest oil exporter and owner of the world's second-largest natural gas reserves after Russia, on May 31 said that it plans to spend US$12.3 billion in foreign currency and rial-denominated bonds during the next three years to fund the South Pars project.

In January, CNPC signed a US$1.76 billion agreement with National Iranian Oil on the development of Iran's North Azadegan oilfield, which has an estimated oil reserve of 6 billion barrels, China Knowledge reported earlier.

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