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Reports: Chinese Energy Giant Was Under US Pressure to Exit Iran Gas Project

China National Petroleum Corporation (CNPC)'s Dalian Petrochemical Corp refinery is seen near the downtown of Dalian in Liaoning province, China July 17, 2018. Picture taken July 17, 2018. REUTERS/Chen Aizhu

After Iran said China National Petroleum Corp. had quit the South Pars gas field project, reports published Monday said CNPC had been under pressure to do so because of US sanctions

This article originated in VOA’s Persian Service.

Published reports say a Chinese state energy company that appears to have pulled out of a natural gas project in Iran had been under pressure to do so because of U.S. sanctions against Tehran.

Iranian oil minister Bijan Zanganeh announced the departure of China National Petroleum Corp. (CNPC) from the joint venture to develop Iran’s South Pars offshore gas field in comments Sunday reported by his ministry’s website.

Zanganeh said Iranian company Petropars, which originally had partnered with CNPC and France’s Total on the project, will develop the gas field on its own.

Total initially held a 50.1% stake in the joint venture announced in 2017, while CNPC had 30% and Petropars had 19.9%. Total withdrew from the project in August 2018 as the U.S. began reimposing sanctions on Iran to pressure it to negotiate a new deal to end its nuclear and other perceived malign activities.

Neither CNPC nor the Chinese government made any comment about the South Pars project on Monday, a public holiday in China.

But a Wall Street Journal report said CNPC executives previously had acknowledged that the company was struggling to find banks to transfer funds to Iran due to U.S. pressure. The article said CNPC’s own bank, Bank of Kunlun, had told customers that it was no longer processing trades with Iran while publicly asserting that it intended to keep its business with Tehran going.

The South China Morning Post reported that CNPC also “could have cause for concern when it comes to (U.S.) sanctions” because the company’s website says it has a four-year-old U.S.-based subsidiary that has made a “significant financial investment” in the United States.

The Trump administration has been unilaterally toughening sanctions on Iran since last year, calling on other nations not to do business with its energy and financial sectors and imposing secondary sanctions on foreign companies and individuals who defy those warnings.

U.S. officials sanctioned several Chinese shipping companies and executives last month for importing Iranian oil in defiance of a total ban on Iranian oil exports imposed by the U.S. in May.

A Bloomberg report said CNPC’s role in the South Pars project had been uncertain for several months. It said Zanganeh had complained in February that CNPC had not carried out any of its share of the work. The report said CNPC was in negotiations to remain a partner in the project as recently as August, according to the head of Iran’s Pars Oil and Gas Co.