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China National Petroleum Corp has pulled out of a deal to develop Iran’s South Pars field. Photo: AP

Chinese state oil firm withdraws from US$5 billion deal to develop Iranian natural gas field, Tehran says

  • South Pars field agreement, struck after Iran’s 2015 nuclear pact, appears to be latest business casualty of US pressure campaign on Tehran
  • French oil company Total SA pulled out of project earlier due to US sanctions on Iran

Chinese state-owned oil company China National Petroleum Corporation has pulled out of a US$5 billion deal to develop a portion of Iran’s massive offshore natural gas field, the Islamic Republic’s oil minister said on Sunday, after France’s Total SA earlier withdrew from the agreement over US sanctions.

The South Pars field deal, struck in the wake of Iran’s 2015 nuclear pact with world powers, appears to be just the latest business casualty of America’s pressure campaign on Tehran following President Donald Trump’s unilateral withdrawal of the US from the deal.

It also comes as China and the US engage in their own trade war, as Beijing and Washington levy billions of dollars of tariffs on each other’s goods.

Oil minister Bijan Zangeneh, quoted by the ministry’s Shana news agency, on Sunday said that China National Petroleum Corp was “no longer in the project”. He did not elaborate or give any reason for the withdrawal.

Officials in Beijing did not immediately acknowledge the decision. However, Iranian Foreign Minister Mohammad Javad Zarif separately complained on Sunday about the US campaign against Tehran and its impact on foreign investments.

“We have been facing plenty of problems in the field of investment because of the US maximum pressure policy,” Zarif told a parliamentary committee, according to the semi-official Tasnim news agency. “We are trying to remove the problems.”

After withdrawing from the nuclear deal with Tehran over a year ago, the US imposed sanctions on Iran that have kept it from selling its oil abroad and have crippled its economy. Iran has since begun breaking terms of the deal.

We have been facing plenty of problems in the field of investment because of the US maximum pressure policy. We are trying to remove the problems
Parliamentary committee

There have been a series of attacks across the Middle East that the US blames on Iran. Tensions reached their height on September 14, with a missile and drone attack on the world’s largest oil processor in Saudi Arabia and an oilfield, which caused oil prices to spike by the biggest percentage since the 1991 Gulf war. While Yemen’s Iranian-allied Houthi rebels claimed responsibility for the assault, Saudi Arabia said it was “unquestionably sponsored by Iran”.

Iran denied being responsible and has warned any retaliatory attack targeting it will result in an “all-out war”.

Additional reporting by Agence France-Press