China delays implementation of $41bln oil contract in Iran

Azerbaijan, Baku, Sept. 16 /Trend T.Konyayeva/

Chinese companies SINOPEC, SINOC and CNPC delay investments of about $41 billion directed to develop Iranian joint oil fields with Iraq and Qatar, Mehr News Agency reported.

Chinese companies in Iran are replacing European companies, which have recently withdrawn from Iran's oil sector because of the threat of penalties for violation of the UN Security Council's resolutions against the Islamic Republic.

Status of the projects to be implemented by the Chinese companies in Iran:

Iran's refusal to abandon its nuclear activities has resulted in resolutions adopted by the UN Security Council in 2010, as well as additional unilateral sanctions approved by the U.S. Congress and the foreign ministers of all EU countries, which were primarily directed against the banking, financial and energy sectors of Iran.

Restrictions imposed by the EU include the ban on the sale of equipment, technologies and services to Iran's energy sector which is a major source of revenue for the Iranian regime; the same measure refers to the refining industry. New investments in Iran's energy sector have also been also prohibited as a whole.

Last September, expanded U.S. sanctions on Iran have prompted four of Europe's five biggest oil companies - Total, Statoil, Eni and the RD/Shell - to stop investing in Iran. Later, in October, Inpex, Japan's top oil explorer, announces withdrawal from Iran's Azadehgan oil field project to avoid U.S. sanctions. Inpex has invested $153 million in this giant project.

Iran is currently China's third largest supplier of crude oil, providing China with roughly 12 percent of its total annual oil demand.

Reports indicate that the volume of Iran-China trade stood at about $30 billion in 2010.