China National Petroleum Corporation International (CNPCI) and the Swiss-based Naftiran Intertrade Company (NICO) inked a deal in Lausanne on Sunday to transfer 70 percent stake in Iran's South Azadegan oilfield development project to the Chinese firm.
NICO and Japan''s Inpex are holding 20 percent and 10 percent of the shares in the project respectively, SHANA news agency reported on Monday.
CNPCI is a subsidiary of China National Petroleum Corporation (CNPC).
Initially, NICO had 90 percent share for the development and 10 percent of the project went to Inpex. However, NICO was unable to finance the project and handed CNPCI 70 per share of the development in an MOU signed this spring.
Based on the contract finalized Sunday, the Chinese company will secure 90 percent of the required financing for the project.
The project reportedly needs an investment of $2.5 billion. The field will eventually produce 260,000 barrels of oil a day (150,000 barrels in first phase and 110,000 barrels will be added to production in the second phase), according to China Daily.
North field
CNPC won a $1.76 billion deal in January to develop the North Azadegan oilfield.
According to the agreement, the Chinese company has undertaken to develop the field in two phases. Upon the completion of the first phase, the start of second phase will be dependent on presenting a comprehensive plan by CNPC and its endorsement by the NIOC.
The deal is in the form of buy-back terms, under which CNPC will develop the field and hand over operations to Iran. CNPC will receive payments from oil production for a few years to cover its investment.
The North Azadegan oilfield is located in Iran''s western province of Khuzestan. The field has estimated reserves of 6 billion barrels of oil.
Output at the North Azadegan oilfield is expected to reach 150,000 barrels per day when both the phases are completed, China Daily reported.
Azadegan is the world's biggest united oilfield discovered in the last 30 years and has reserves of 42 billion barrels of oil. It covers an area of about 900 sq km - including southern and northern part.