Chinese oil giant CNPC may be latest to bow to US sanctions on Iran

Iranian minister on Sunday said the state-owned company had pulled out of US$5 billion South Pars field deal

It comes after six Chinese companies and five executives were sanctioned by the US for transporting oil out of Iran

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The US has been seeking to cut off investment in Iran’s energy sector as part of an economic pressure campaign that China has criticised. Photo: Reuters

Published: 10:30pm, 7 Oct 2019Updated: 12:32am, 8 Oct 2019

A Chinese oil giant appears to be the latest company to bow to US sanctions on Iran, with Tehran saying that the state-owned China National Petroleum Corp (CNPC) was no longer part of a US$5 billion deal to develop a gas field in the country.

The withdrawal – not confirmed by CNPC but noted by Iranian Minister of Petroleum Bijan Zangeneh in official media on Sunday – comes as the United States has been seeking to cut off investment and cash flowing into Iran’s energy sector, part of an economic pressure campaign that China has criticised and resisted.

The Chinese oil firm’s move to pull out of the natural gas field project also comes as the US and China are due to hold another round of trade talks later this week, and experts say it shows Beijing – long a stalwart economic partner of Iran – is feeling the pressure from Washington.

“It’s partly surprising in a sense, because when times are really bad for Iran, with regards to the international community and the US in particular, China has jumped in with a vengeance and been extending its presence in Iran and specifically in Iran’s oil and gas sector,” said Kevjn Lim, a doctoral researcher with the political science, government and international affairs school at Tel Aviv University.

But it appears that despite rhetoric from Beijing against “US unilateral sanctions and long-arm jurisdiction”, Chinese companies are looking more carefully at their engagement in Iran, while China may be trying to show the US that it could be willing to cooperate in some areas.

Iran’s Minister of Petroleum, Bijan Zangeneh, said China National Petroleum Corp was “no longer in the project”. Photo: EPA