Chinese Sinopec Buys Controlling Interest Iranian Oilfield

Sinopec will soon finalize a deal with the Iranian government for a 51% stake in the Yadavaran oilfield and an annual supply of 10 million tonnes of liquefied natural gas (LNG) to China, a high-ranking Iranian diplomat told Interfax.

Iran and China have been communicating closely on issues relating to the deal, including the strong fluctuation in international oil prices since the deal was signed, said Farhad Assadi, Charge d'Affaires for the Iranian Embassy in Beijing.

China and Iran signed the MOU in Beijing in October of 2004. According to the agreement, Sinopec is allowed to participate in the development of the oilfield and China will be supplied with 10 million tonnes of LNG per year for 25 years. The project is estimated to be worth $70 billion.

The Yadavaran oilfield has more than 30 billion barrels of proven crude reserves.