Iran reiterated to China on Saturday it could take back control of a gas field being developed by its national oil company unless it speeds up investment, one week after the new Iranian oil minister said no foreign contractors were needed.
"Ultimatums will certainly be given to the China National Petroleum Corporation (CNPC) if the delays in developing the phase 11 of South Pars continues," Ahmad Qalebani, Head of National Iranian Oil Co (NIOC) was quoted as saying by the semi-official Mehr news agency.
The National Iranian Oil Company (NIOC) said in June that it would "replace CNPC with domestic companies" if the Chinese company did not step up the pace of the project, and the latest warning came after Oil Minister Rostam Qasemi said Iran's Revolutionary Guards' engineering arm should take over from foreign companies.
"If the current trend of the development of South Pars phase 11 continues, it is also possible that the whole contract be ceded to powerful domestic contractors," Qalebani said. Qasemi joined the Oil Ministry this month after heading Khatam al-Anbia, the Revolutionary Guards' company that has become increasingly active in Iran's energy sector and many other parts of the economy.
The Guards, Khatam al-Anbia and Qasemi himself are all under sanctions imposed by countries, including the United States and the European Union, that accuse them of involvement in helping Iran develop nuclear technology that could be use for weapons, something Tehran denies it is seeking. Tehran signed a $4.7 billion contract with CNPC in 2009 to help develop phase 11 of South Pars - the giant gas field that Iran shares with Qatar - replacing France's Total SA which it had accused of repeated delays.
Total and other European companies were forced to pull out of Iran by tightened EU sanctions that banned companies from investing in Iran's oil and gas industries. US companies were already banned. Analysts expected Asian companies to take much of that business, but Iran has expressed dissatisfaction with the pace of work. Iran has the second biggest gas reserves in the world after Russia, but sanctions over its disputed nuclear programme and other factors have slowed its development as a major exporter.
The offshore South Pars field, the world's largest reservoir of gas, contains about half of the estimated 28 trillion cubic metres of the country's gas reserves. Iran said last year production at South Pars rose by nearly 30 percent during 2009-10 and that the field is expected to generate income of up to $130 billion annually once all 24 development phases are completed.
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