Iran-CNPC Breakup: Tehran Eyes the West

MONITOR GLOBAL OUTLOOK

Tehran announced this week that it is terminating a $2.5 billion contract with China National Petroleum Corp. (CNPC) to develop the South Azadegan oil field Iran shares with Iraq.

The National Iranian Oil Company (NIOC) formally canceled the deal as of April 29 because, it said, the Chinese oil giant has conducted “no effective work” since signing on to the project in 2009 and thus failed to meet its contractual obligations, according to domestic media reports. Also, on April 30, Iranian oil minister Bijan Namdar Zanganeh told local media that Chinese energy firm Sinopec, which is developing the Yadavaran oil field, which also extends into Iraq, has experienced “problems with regards to progress” as well.

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