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CNPC replaces Total in Iran deal

IRAN yesterday signed a contract with China National Petroleum Corp for the development of phase 11 of the South Pars gas field in the Gulf, replacing France's Total, Iran's IRNA news agency reported.

The deal is estimated to be worth US$4.7 billion, a senior Iranian oil official was quoted as saying.

Seifollah Jashnsaz, managing director of the National Iranian Oil Co, was also quoted by IRNA as saying that Total could continue negotiations on involvement in the field's downstream sector.

The contract was signed in Beijing by an Iranian delegation headed by Jashnsaz, according to IRNA.

South Pars, the world's largest gas reservoir, is shared by Iran and Qatar. The Iranian part is divided into 24 phases.

Total has a memorandum of understanding with National Iranian Oil to develop phase 11 of South Pars but the project has been overshadowed by haggling over contract terms.

In March, Jashnsaz said Total had wasted time on the phase and a new partner would enter the project.

In April, Total's Chief Executive Christophe de Margerie said it saw the investment terms offered by Iran for developing gas fields as "not attractive enough."

Earlier this year, the Paris-based company said it did not expect to sign an agreement on South Pars anytime soon.

Iran, the world's fifth-largest oil exporter, on Sunday said it planned to issue US$12.3 billion of foreign currency and rial-denominated bonds over the next three years to help finance the development of South Pars. Investment for remaining projects at the fields would be about US$50 billion.

On Tuesday, a senior executive of Norway's StatoilHydro said it should complete a South Pars project this year.


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