Eric Watkins
Senior Correspondent
LOS ANGELES, Nov. 2 -- China National Offshore Oil Corp. (CNOOC) is in talks with state-owned National Iranian Oil Co. (NIOC) to further develop a major offshore natural gas field, according to Chinese state media.
China Business News reported Nov. 2 that CNOOC's discussions with NIOC focus on the offshore North Pars field, which has 1.4 trillion cu m of gas reserves.
CBN reported Iranian state media as recently saying that CNOOC has signed a memorandum of understanding with NIOC covering four phases of development for North Pars.
Under the MOU, the report said CNOOC will spearhead the construction of a LNG liquefaction plant as well as transportation and marketing of the LNG.
Iranian oil Minister Kazem Vaziri Hamaneh was quoted as saying that NIOC hopes to finalize the deal by March 2007. If so, he said, Iran will supply gas from the field to CNOOC for a period of 25 years.
In May, NIOC Managing Director Gholamhoseyn Nowzari said NIOC had plans for the development of the North Pars field, along with the South Gesho field, but that tenders for the development of the fields had not yet been finalized and that relevant technical studies were being carried out.
Later, in June, Iran and China signed an agreement on oil and gas exploration in the Garmsar Block in the central region of Iran, which includes the provinces of Semnan, Qom, and Tehran.
Under terms of that agreement, signed between NIOC and Sinopec, the Chinese contractor will pay all exploration costs, estimated at $20 million, with exploration to last as long as 4 years. If initial exploration is successful, Sinopec has agreed to increase its financial commitment to about $59 million.
At the time, Nozari said the groundwork had been laid for "wider political and economic cooperation between Iran and China."
Contact Eric Watkins at [email protected].
