[A-List] Report: China, Iran To Sign Major 25-Year Oil Field Agreement

["tony black" <tal@xxxxxxxxxxxxx>]

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BB93C0C0D%2DED22%2D47C0%2DA5ED%2DEFD76C733D0B%7D&siteid=google&keyword=


Market Watch
February 16, 2006


China, Iran may sign oil field pact in March - report


BEIJING - China and Iran may sign a pact as early as
March to jointly develop the massive Yadavaran oil
field in southern Iran, the influential Chinese
magazine Caijing said in a report Thursday.

China Petroleum & Chemical Corp. Group, or Sinopec
Group, may take a 51% share in the field, while
India's Oil & Natural Gas Corp. (500312.BY) may take
29% and the remaining 20% may go to Iran's domestic
oil companies, the report quoted Mu Shuling, the board
director of China Petroleum & Chemical Corp. (SNP) as
saying.

Royal Dutch Shell PLC (RDSB.LN) is also interested in
the 20% share, the report said, citing Mu.

A delegation led by Ma Kai, the minister of China's
National Development and Reform Commission, the
country's top economic planning agency, plans to visit
Iran as early as March to sign the agreement,
according to the magazine.

China and Iran may sign a pact as early as March to
jointly develop the massive Yadavaran oil field in
southern Iran. China Petroleum & Chemical Corp.
Group, or Sinopec Group, may take a 51% share in the
field, while India's Oil & Natural Gas Corp.
(500312.BY) may take 29% and the remaining 20% may go
to Iran's domestic oil companies, the report quoted Mu
Shuling, the board director of China Petroleum &
Chemical Corp. (SNP) as saying. Royal Dutch Shell PLC
(RDSB.LN) is also interested in the 20% share, the
report said, citing Mu.

(In "China, Iran May Sign Oil Field Pact In March -
Report" published at 0601 GMT, the percentage of the
remaining potential stake in the field was misstated.)


The Yadavaran oil field is located in southern Iran,
with 300,000 barrels a day of potential production, it
said.

As part of the deal, China also plans to buy 10
million metric tons of liquefied natural gas annually
for 25 years from Iran, said the report.

The LNG purchase may start from 2010, instead of 2009,
as previously planned, the magazine quoted Mu as
saying, without disclosing any reason.

But an official from Sinopec Group told Dow Jones
Newswires Thursday they haven't received any notice
from the government on Ma's visit to Iran.

An official from Shell confirmed the company has
supported Sinopec in a technical proposal for the
appraisal and development of the Yadavaran field and
Sinopec has submitted the proposal to National Iranian
Oil Co. (NIO.YY), or NIOC. However, he would not
comment on whether an oil field pact would be signed
soon.

Web site: http://caijing.hexun.com
-Edited by Ryan Woo and George Bernard
------------------------------------------------------
http://news.yahoo.com/s/ap/china_iran_oil


Associated Press
February 17, 2006


Reports: China, Iran Near Huge Oil Deal
By ELAINE KURTENBACH, AP Business Writer


China and Iran are close to setting plans to develop
Iran's Yadavaran oil field, according to published
reports, in a multibillion-dollar deal that comes as
Tehran faces the prospect of sanctions over its
nuclear program.

The deal is thought potentially to be worth about $100
billion.

According to Caijing, a respected financial magazine,
a Chinese government delegation is due to visit Iran
as early as March to formally sign an agreement
allowing China Petrochemical Corp., also known as
Sinopec, to develop Yadavaran.

The Wall Street Journal also reported in Friday's
editions that the two sides are trying to conclude the
deal in coming weeks before potential sanctions are
imposed on Iran for its nuclear ambitions. The report
cited unnamed Iranian oil ministry officials familiar
with the talks.

The deal would complete a memorandum of understanding
signed in 2004.

In exchange for developing Yadavaran, one of Iran's
largest onshore oil fields, China would agree to buy
10 million tons of liquefied natural gas a year for 25
years beginning in 2009, the Caijing report said,
citing Sinopec board member Mou Shuling.

Chinese and Iranian officials in Beijing said they
could not confirm the report.

"I know nothing about this. I can't answer your
questions," said Ma Li, a spokeswoman for the National
Development and Reform Commission, the planning agency
in charge of China's energy and resources industries
that Caijing said would dispatch officials to Iran.

Staff at Iran's embassy in Beijing said they were
aware of the report but had not heard Mou's remarks,
which Caijing said were made at a recent embassy
event.

A written statement from the Iranian Embassy noted
that the two countries have been working together in
various energy fields, "following the rule of mutual
benefits and respect in all bilateral cooperation."

Calls to Sinopec's headquarters were not answered late
Friday.

The Caijing report said Chinese and Iranian officials
met in December for talks on the project. It cited Mou
as saying the two governments and companies involved
were moving ahead with the deal despite the
controversy over Iran's nuclear program.

According to the Caijing report, Sinopec would hold a
51 percent stake in the Yadavaran project, with
India's Oil and Natural Gas Corp., or ONGC, taking 29
percent. The remainder would go to Iranian companies
and possibly to Royal Dutch Shell PLC, which has also
expressed interest, it said.

The report said there was some disagreement over
intended capacity, with Iran asking China to agree to
daily output of 300,000 barrels of oil, while Sinopec
preferred to set a target of 180,000 to avoid excess
production.

Sinopec, Asia's largest refiner, has shares traded in
New York, London, Hong Kong and Shanghai.

China, seeking oil and gas to fuel its booming economy
amid stagnant production at home, has been snapping up
energy resources in places as far flung as Venezuela,
Kazakhstan, Nigeria and Australia. Its investments in
Iran and Sudan have prompted complaints it is
undermining diplomatic efforts to bring recalcitrant
regimes in line.

Beijing has strongly urged that a diplomatic solution
be found to the impasse over Iran's nuclear program.

Western nations fear that Iran plans to develop
nuclear weapons, but Iran insists its intentions are
purely for generating electricity. Growing
international concern about its aims contributed to
Tehran being reported to the U.N. Security Council by
the 35-nation board of the International Atomic Energy
Agency, the U.N.'s nuclear watchdog.

On Thursday, France's foreign minister, Philippe
Douste-Blazy, accused Iran of secretly making nuclear
weapons.

The Security Council is due to consider Iran's nuclear
activities next month. The council has the power to
impose economic and political sanctions on Iran, but
members China and Russia could exercise their veto
power against such measures.





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