Mehr: CNPC Pulls Out of Iran's South Pars Project

DUBAI - China National Petroleum Corp. or CNPC, the country's largest oil producing company, has pulled out of developing Phase 11 of Iran's offshore South Pars gas field after constant and prolonged delays in the project, the Persian semi-official Mehr news agency reported Sunday.

The firm, which had delayed the project for more than 1,130 days, has already withdrawn all of its workers from the southern Iranian port city of Assaluyeh, the onshore part of South Pars gas field in the Persian Gulf, Mehr said, citing information from the oil ministry.

CNPC has also failed in starting preliminary steps for the project such as leveling the land, it said.

In 2009, Tehran inked a 5 billion dollar contract with CNPC to develop the field, after it accused France's Total SA of delaying the project. Last year, it warned CNPC that it would cancel the contract if the delays in developing the field continue.

Iran has previously expected the project to produce 2 billion cubic meters of natural gas and 70,000 barrels of gas condensates a day.

Iran has invited new companies--notably Asian ones--to replace Western majors that refused to sign up for new oil and gas projects due to sanctions over its nuclear program, but the policy has had mixed results.

Copyright (c) 2012 Dow Jones & Company, Inc.

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