CNPC ink pact to develop South Azadegan oilfield

China Daily reported that China National Petroleum Corp has signed MoU with National Iranian Oil Company over the development of South Azadegan oilfield under which the Chinese company will cover 90% of development costs and take 70-percent stake in the project.

Mr Naji Sadouni MD of Oil Engineering and Development Co of NIOC said the project needs an investment of USD 2.5 billion. The field will produce 260,000 barrels of oil a day all together.

The report did not disclose financial details.

Mr Sadouni said South Azadegan oilfield development has budgeting problems and NICO cannot afford 90% of the project. The Japanese helped NICO with USD 3 billion. But as the world economic conditions have changed, it is not possible to fund the project through this strategy.

CNPC on Friday declined to comment on the report. But a CNPC manager in Beijing told Reuters that the MOU was actually signed in early spring of this year and the two sides made no real breakthrough in the negotiations since then.

CNPC won a deal in January to develop the North Azadegan oilfield.