Now, mind you, it’s important to remember that China under almost any circumstances was not going to step away from doing energy deals with Iran, even if their business partners in Tehran were drinking toasts to the imminent arrival of the Twelfth Imam with highly enriched uranium and threatening to nuke Israel the day after tomorrow. But the timing of this announcement, in which SINOPEC has signed a deal to help develop the mammouth Yadavaran oil field, comes just days after the so called intelligence community in the United States presented the Bush administration with its don’t worry, be happy assessment of Iran’s nuclear program (an assessment that my colleague Joe Klein calls–remarkably–“the truth” in the pages of this week’s magazine. The truth? From the CIA? About Iran? Surely you jest, Joe. What the CIA knows about Iran comes mainly from the Israelis, the Saudis, and the Egyptians. On our own, as the saying goes, we don’t know jack about Iran, so the informed question now is: do the Israelis, the Egyptians or the Saudis agree with the US “intelligence community’s” conclusions? The Israelis, according to published reports, have already weighed in, and they vote no. Any bets out there on where the other two stand?)
But now that the Tehran regime has international opinion running in its favor, and that there is no chance–none–of any further sanctions, note the money quote in the following dispatch from the Financial Times: “If other countries who like to invest in oil and gas hesitate, they will lose opportunities,” said Gholam-Hossein Nozari, Iran’s oil minister.
Indeed, the question now is, how long will it be before European oil majors–BP, Royal Dutch Shell, Total– make the same arguments to their own governments?
Check that. They already have been making those arguments. The question is, how long before their government’s start agreeing with them?
The FT piece is a paid site, so the entire article folos…
Iran signs $2bn oil deal with China
By Najmeh Bozorgmehr in Tehran
Published: December 9 2007 22:41 | Last updated: December 9 2007 22:41
Iran signed a $2bn oil contract with Sinopec of China on Sunday, sending a signal to western companies that they might miss out on potentially lucrative contracts with one of the world’s biggest energy exporters if they continued to heed US-inspired sanctions against Tehran.
“If other countries who like to invest in oil and gas hesitate, they will lose opportunities,” said Gholam-Hossein Nozari, Iran’s oil minister.
The contract to partly develop the giant Yadavaran oil field in south-west Iran is one of the biggest Tehran has signed and is the first with a Chinese company. “Implementation of the contract will start immediately,” Mr Nozari said.
Iran sits on the world’s second largest oil and gas reserves but it has not been able to attract enough investment for its development projects, fuelling fears that it might face an energy crisis in less than a decade.
Tehran has not signed any big oil and gas contracts with foreign companies during the past few years due to the prospect of international sanctions over the country’s nuclear programme. Iran’s buy-back scheme, under which investors must turn over the operation of fields – after their development – to the National Iranian Oil Company is another disincentive.
Sunday’s deal reflects Tehran’s attempt to drive a wedge between the US and its allies by attracting non-western companies.
Yadavaran is estimated to contain 12bn-18bn barrels of oil. The contract involves production of only 85,000 bpd by the time the field is developed in four years. The second phase, to produce another 100,000 bpd, will be decided later.
Sinopec is obliged to give 51 per cent of its sub-contracts to Iranian companies.
Mr Nozari also said Iran had signed multi-billion dollar contracts with some other non-western companies to develop two major upstream oil fields a few months ago. He refused to give more details because the companies feared facing international pressure.
Japan’s Inpex withdrew from the development of Azadegan oil field last year following US pressure.
France’s Total, Royal Dutch Shell and Spain’s Repsol YPF have been negotiating to develop some parts of South Pars, the world’s biggest gas field. Iran has given them an ultimatum that it could wait only until June 2008.