Azerbaijan, Baku, Sept. 28 /Trend S.Isayev/
The CNPC (State China National Petroleum Corp.) has revealed the reason it has decided to withdraw from Iran's Phase 11 of the South Pars project, the International Oil Daily reported.
According to CNPC, the company went for the withdrawal option due to concerns that war could possibly break out in Iran and an inability to find gas buyers.
After a couple of years of delay in starting the development of the South Pars 11th Phase, Chinese CNPC pulled out of this phase of the development and withdrew all of its experts and workers from Iran's Asaluyeh region to Beijing, ISNA reported earlier in September.
"CNPC can't find buyers for gas production from South Pars, so that's why we can't start production on there," the CNPC source said.
Iran and China's CNPC (China Natural Petroleum Cooperation) signed a $4.7 billion contract to develop Phase 11 of South Pars in 2009. Previously the French Total Company withdrew from the development of the 11th Phase and Iran replaced Total with CNPC.
France's Total cancelled a contract to develop Phase 11 and Iran replaced Total with CNPC. The Iranian Oil Ministry had warned CNPC several times because of repeated delays in the company's operation at South Pars Phase 11.
The source in CNPC also added that the company is also worried that war could break out in Iran with Israel threatening to strike the country's controversial nuclear facilities and is thus not willing to help Tehran build the IPI pipeline. Most CNPC staff have left South Pars, according to the source.
Despite CNPC's withdrawal from Phase 11 of the South Pars project, the Chinese firm remains keen on the North Azadegan project and South Azadegan project.
CNPC recently decided to complete detailed design work by the end of this year for the North Azadegan project and plans to complete 10 per cent of the total construction and 25 per cent of the project schedule by then.
It also aims to drill 18 horizontal wells and complete drilling 17 of them by the end of this year in North Azadegan, another CNPC source told IOD. The North Azadegan oil field was awarded in a $2 billion deal signed in 2009. Initial oil production is earmarked at 75,000 barrels per day.