Iran cancels CNPC contract in still undeveloped Azadegan oilfield

Iran has terminated China National Petroleum Corporation's (CNPC) contract to develop the Azadegan oilfield after the Chinese energy giant ignored repeated appeals to work on it, Iranian news agency Shana said yesterday.

China's biggest oil-and-gas company signed up to develop Iranian fields after Japanese and European companies pulled out due to sanctions in the middle of the last decade.

State-run CNPC has expanded over the past decade to more than 30 countries around the globe to help secure supplies of the oil and gas that China needs to sustain its economic growth.

But concern over scarce global oil supplies that drew CNPC into Iran have largely vanished over the last few years, thanks to a surge in production in North America and promising new gas prospects in China itself, Australia and off East Africa.

In 2010, Beijing instructed Chinese energy companies to slow or stop work in Iran, because China wanted to strengthen ties to the US energy sector and feared dealing with Tehran would jeopardise those plans.

Over years of Chinese inaction, Iranian officials have been demanding that these companies honour their deals.