* No change in pace of Chinese investment in Iran
* China fills vacuum left by European oil firms
By Simon Webb and Chen Aizhu
DUBAI/BEIJING April 13 Chinese state oil firms
have maintained the pace of project development in Iran while
Beijing resists any new sanctions on the energy sector designed
to press Tehran to curb its nuclear programme, industry sources
said on Tuesday.
China, which has close economic ties with Iran, has much to
lose from any sanctions that limit new investment to develop the
world's second-largest oil and gas reserves.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a factbox on Iran's crude export and fuel import customers,
click on [ID:nLDE63A011]
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Chinese firms have stepped into the vacuum left by western
companies who have yielded to years of political pressure to
steer clear as the U.S. and its allies look to isolate Iran over
its nuclear programme.
Western powers suspect Iran wants to develop nuclear
weapons, which Tehran denies.
"Everything is moving ahead as planned," said a source at
China's National Petroleum Corporation (CNPC). "As a state
energy firm, your job is to serve the state interest. You do
what the government encourages you to do."
China has made clear this week that it dislikes a proposed
ban on new energy investment in Iran as it joined major powers
drafting a sanctions resolution against Iran for refusing to
suspend its uranium enrichment programme. [ID:nTOE63C07X]
Iran's foreign ministry said on Tuesday it did not believe
China was close to approving new U.N. sanctions. ID:nLDE63C1EJ]
Tehran has become more dependent on investment and
technology from energy-hungry China over the past few years as
the political dispute has dragged on and U.S. and European firms
have stalled on new deals with Iran.
"The Chinese are among the last ones there with a
significant presence," said Valerie Marcel, associate fellow at
CNPC clinched a $4.7 billion deal earlier this year to
develop part of Iran's giant South Pars gas field, supplanting
Total (TOTF.PA) as lead partner in the project after the French
firm delayed its investment decision under political pressure.
CNPC beefed up its staff numbers in Iran late last year,
even as Western firms that were still involved in Iran scaled
back. It also has a $2 billion deal to develop the North
Azadegan oilfield. China's Sinopec has a deal for another of
Iran's largest oilfields, at Yadavaran.
Chinese investment and progress on new projects has
sometimes been slow, industry sources said, but this was due to
difficulties working with Iranian contractors and bureaucracy
rather than politics.
"The Chinese are developing at a reasonable pace," said a
senior executive at a Western oil firm. "They had a steep
learning curve to go through initially, but they weren't slow
due to geopolitical concerns."
For U.S. and European oil firms sanctions on new energy
projects would make little difference to their approach to Iran.
The U.S. banned its firms from investing there years ago.
European firms such as Italy's ENI (ENI.MI) and Norway's
Statoil (STL.OL) have been finishing off projects they began
years ago, and have scaled down their presence as work ends.
"Not much has changed," the Western oil firm executive said.
"We will hold our position while we see what has been concretely
proposed in Washington. We are on a watching brief."
In the first months of U.S. President Barack Obama's
administration, energy firms stepped up contacts with Iran in
the hope that relations would improve. But political turmoil
after Iran's disputed presidential elections last year sent them
back to their tricky holding game, whereby Europe's energy
giants try to convince Tehran they are interested while playing
down any progress back home.
Potential new sanctions that U.S. politicians want to impose
on fuel suppliers to Iran have had more of an impact in the past
year on international oil firms' trade links with Iran.
Russia's LUKOIL (LKOH.MM) was the latest to halt shipments
to Iran, which depends on fuel imports to meet up to 40 percent
of its gasoline demand. [ID:nLDE63606I] It follows Royal Dutch
Shell (RDSa.L) and trading giants Glencore and Vitol in halting
For more stories on political upheaval in Iran, click on
For full coverage of a nuclear summit in Washington, click
(Additional reporting by Dmitry Zhdannikov in Moscow, Tom
Bergin in London, Sylvia Westall in Vienna, Muriel Boselli in
Paris and Stephen Jewkes in Rome; Editing by Sue Thomas)