China may boost investment in Iran's oil industry by three times, deputy oil minister and managing director of the National Petrochemical Company (NPC), Abbas Shari Moghadam was quoted by Shana News Agency as saying Wednesday. Referring to the recent visit of an Iranian energy delegation to China, Shari Moghadam said pursuant to the negotiations, China is now considering a triple increase in funding Iranian oil and gas projects in proportion to frozen assets in Chinese banks due to financial sanctions against Iran. So far Chinese investment in Iranian oil and gas projects has equaled blocked Iranian assets, the official noted, adding that China will soon inform Iranian oil officials of its decision regarding tripling the amount of funding for energy projects.
As the biggest oil importer from Iran, China has an outstanding balance on previous contracts. Iran aims to recover part of its oil revenues from China by allowing China to fund petrochemical projects. Chinese companies will fund a total of 18 petrochemical projects in the near future. Several petrochemical projects due for completion in the Fifth Five-Year Economic Development Plan (2011-2016) have been postponed to the 6th plan (2016-2021). Another 67 contracts with the capacity to yield 60 million tons are yet to be completed. Investment opportunities in the petrochemical industry are estimated at $30 billion.
NPC Dues Unpaid
According to the law, 70 percent of revenues earned by transferring petrochemical complexes to private sector should have been handed over to the NPC for further investments in petrochemical projects. Nonetheless, the entire revenues were transferred to the treasury, Shari Moghadam said, adding that currently treasury's debt to the NPC amounts to 7,700 billion rials ($230.9 million). NPC will retrieve its due sums to invest in new petrochemical projects "once the economic conditions improve," he reiterated.
Utilizing the resources available to the National Development Fund of Iran (NDFI) is contingent on the conclusion of a final agreement between Iran and the world powers whereby all financial sanctions are lifted. Currently part of NDFI assets are blocked in foreign banks; moreover, there are no means to the Iranian government to transfer and repatriate them. After his visit to Beijing, Oil Minister Bijan Namdar Zanganeh also announced that Iran and China are eager to expand ties and the two sides will increase cooperation in the energy sector once the sanctions are terminatd. He underlined China as the biggest buyer of Iranian crude at the time of oil and trade restrictions, stating Tehran wants to maintain partnership with Beijing after the lifting of sanctions. In his first visit to China since taking office, Zanganeh had meetings with general manager of the China National Petroleum Corporation (CNPC), Chairman of China Petroleum and Chemical Corp. (Sinopec), and Director of China's National Energy Administration Nur Bekri.
After eight days of marathon talks on Tehran's nuclear program in Lausanne, Switzerland, Iran and the P5+1 (Britain, China, France, Russia, the US plus Germany) reached a framework agreement on April 2 that calls for lifting all trade sanctions against Iran. The details of the agreement are to be finalized by a June 30 deadline.