Source: Press TV
Iran has terminated a USD 2.5 billion contract with a Chinese oil giant to develop a major oil field in the south of the country after the company failed to fulfill its obligations.
A drilling rig in Iran's Azadegan oil field (File photo)
The deal was cancelled after Iran had repeatedly warned the China National Petroleum Corporation International (CNPCI) of expropriation for failing to make good on its commitments with respect to the development of South Azadegan oil field.
Managing Director of the National Iranian Oil Company (NIOC) Rokneddin Javadi said Tuesday that a 90-day ultimatum had been given to the Chinese company in February. The Chinese company, however, took no action one month after the ultimatum during which it was supposed to reassess the development process of the project, he added.
Javadi said that Iran decided to cancel the contract due to "non-compliance" of the Chinese oil company to deliver on its obligations.
In February, Iranian Oil Minister Bijan Namdar Zanganeh expressed dissatisfaction with the performance of the Chinese contractor and said no major progress had been observed in the massive oil filed.
He warned the CNPCI of expropriation should it continue dragging feet on the development project.
The CNPCI signed a deal with the NIOC in 2009 to develop the South Azadegan oil field which Iran shares with Iraq.
The Azadegan field is one of the world's biggest with estimated reserves of about 42 billion barrels of oil.
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