Iran’s main economic partner, China, has invested around US$40 billion in the Islamic republic’s oil and gas sector, a senior Iranian official said yesterday.
Deputy Oil Minister Hossein Noqrehkar Shirazi also said that Tehran’s oil exports to China fell by 30 percent in the first six months of this year compared with the corresponding period last year.
“The volume [of Chinese investment] in upstream projects is US$29 billion,” Noqrehkar Shirazi told Mehr news agency, adding that Beijing had signed contracts worth another US$10 billion in petrochemicals, refineries and oil and gas pipeline projects.
He also said that China is interested in participating in the building of seven new refineries in Iran.
Iran, OPEC’s second largest oil exporter, has a dilapidated refining sector, forcing it to import petroleum products such as gasoline to meet domestic demand.
Shirazi said that Chinese imports of Iranian oil fell in the first half of the year.
“Although Iran is still among the top 10 oil exporters to China, it is the only country which in the first six months of 2010 has seen its exports to China falling,” he said.
“The volume of oil exports to China in the first six months of this year decreased to less than 9.02 million tonnes or 66.12 million barrels. This shows a 30 percent decrease” over the first half of last year, he said.
In recent years, China has filled the gaps in Iran’s energy sector left by Western firms forced out by international sanctions.
Last year, China became Iran’s number one trading partner, with bilateral trade worth US$21.2 billion against US$14.4 billion three years earlier. Commercial ties between the two countries were almost non-existent 15 years ago, amounting to just US$400 million.
Separately, China Petroleum & Chemical Corp (中國石化), Asia’s biggest refiner, said BP Plc declined an offer by the Chinese company to buy some of its assets.
“We’ve talked to BP on some good assets, but they won’t sell,” Zhang Jianhua (章建華), senior vice president of the company known as Sinopec, said in an interview in Shanghai on Friday, without naming the ventures. “We aren’t in any talks with BP right now.”
In related news, Europe’s largest oil producer by volume plans to dispose of as much as US$30 billion in assets over the next 18 months to raise cash to meet the costs of the Gulf of Mexico oil spill. BP said it has US$16 billion of unused credit lines and plans to cut its debt to as little as US$10 billion over the same period.
China has spent at least US$21 billion on overseas resources in the past year to meet domestic demand, including the acquisition in April of a stake in a Canadian oil-sands project by Sinopec’s parent. The world’s largest energy-consumer relied on imports to meet more than half of its oil needs last year.
“The chances of Sinopec winning bids for BP assets are small, as the European company is in the hands of the UK and US government and would never give strategic resources to Chinese majors easily,” said He Wei (賀煒), an oil analyst with BOCOM International Holdings Co (交銀國際).
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