Done deal? at Azadegan
CNPC 'bags North Azadegan deal'
China National Petroleum Corporation (CNPC) signed a deal today to develop Iran's North Azadegan oilfield, according to Iranian media.
"The contract for the development of North Azadegan oilfield was signed ... between National Iranian Oil Company (NIOC) and the Chinese company CNPC, in the presence of the oil minister and the Chinese ambassador," the Iran's Mehr News Agency reported.
An oil ministry official confirmed the signing and added in comments to Reuters: "It is an agreement, it is final."
North Azadegan is in west Iran, close to the Iraqi border.
"This contract has been signed in the form of the new buy- back (terms)," Mehr News Agency said.
Under so-called buy-backs, companies hand over operations of fields to NIOC after development and then receive payment from oil or gas production for a few years to cover their investment.
Foreign companies regularly complain the terms have not been generous enough, and some say they lose money on the deals. But Iran said last year it had revised oil and gas development contracts to offer more incentives to foreigners.
"Based on initial agreements with the Chinese company CNPC, the contractor is committed to the implementation of the development of the field in two phases," said a fax sent to Reuters that outlined details of the deal.
It added that the "implementation of the second phase of the project rests on the submission of a comprehensive development programme and its confirmation by NIOC".
Under the first phase lasting 48 months, crude output capacity would reach 75,000 barrels per day, it said. According to initial estimates, in-place oil was put at 6 billion barrels.
The period for development and reimbursement would be 12 years, it said.
CNPC has not confirmed the deal.