Source: CNPC Struggles to Finance Iran Gas Project But Not Pulling Out

BEIJING/LONDON - China National Petroleum Corp. or CNPC, the country's largest energy producer, is struggling to finance an Iranian natural-gas project, but it has not pulled out, one Iranian official said Tuesday.

The Iranian official, along with a Chinese oil-company official, both refuted an Iranian report Sunday that said CNPC had pulled out of Iran's offshore South Pars gas field after constant and prolonged delays in the project.

CNPC has had "some difficulties [developing the project]," the Iranian official said, adding that "it has not brought its financing."

However, "there is no formal withdrawal from CNPC. It still has staff in Tehran and in Assaluyeh," the southern Iranian port city where the project is being overseen, the official said.

CNPC's staff numbers have been "very low" in the past two years, and both sides have been in talks to resolve existing delays, the Iranian official said.

A person within CNPC said officials have denied that the company is pulling out of the project and that it remains committed to Iran, including for this project.

In 2009, Tehran signed a $5-billion contract with CNPC to develop the field after it accused French oil major Total SA of delaying the project. Last year, it warned CNPC that it would cancel the contract if delays in developing the field persisted.

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


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