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AFX Europe (Focus): China’s Sinopec group to conclude deal with Iran to develop Yadavaran oil field

Published: Sep 13, 2006

BEIJING (XFN-ASIA) – China Petroleum & Chemical (Sinopec) group, the parent of China Petroleum & Chemical Corp (Sinopec) (SHA 600028; HK 0386; NYSE SNP), is expected to sign a contract with Iran to develop the latter’s Yadavaran oil field soon, the official Shanghai Securities News reported, citing company sources.

The report said Iran would give China’s largest refiner a 51 pct stake in the oil field, the overseas subsidiary of India’s state-owned Oil & Natural Gas Corp would get a 29 pct stake, and the rest would be owned by National Iranian Oil.

Sinopec has agreed to provide equipment for the development of Yadavaran, it said.

China and Iran signed a memorandum of understanding in October 2004 under which Sinopec would develop Yadavaran in exchange for buying 10 mln tons of Iranian liquefied natural gas (LNG) annually for 25 years at at a cost of 100 bln usd.

Royal Dutch Shell, which has offered technical advice to Sinopec on the project, also showed interest in participating in the development of Yadavaran, it said.

Yadavadan is in the south of Iran and has proven crude oil reserves of over 30 bln barrels.

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