Iran announcing completion of its South Pars Gas Field

The net present value of Iran's vast South Pars natural gas field has jumped from an estimated $ 116 billion at the time of last year to now $ 135 billion, according to a senior oil and gas industry source working closely with the Iranian Ministry of Petroleum, last week. The main reason for this rise in ratings is because advances in all areas of development, including the controversial Phase 11, are driven by the increasing involvement of various Chinese companies operating under the U.S. sanctions radar through individual, out-of-contact projects rather than official field developers , have gained momentum.

With this in mind, the Iranian Ministry of Oil now assumes that the entire South Pars project will produce at or near full phase 1 capacity long before the official completion date in March 2022. Since the China National Petroleum Corporation (CNPC) withdrew - at least officially - from the flagship phase 11 project of the South Pars development in October last year, China has been operating on a large scale in Iran according to a project-based "contract-only" mode.

"It was obvious to anyone who knows how China works in such situations, including in neighboring Iraq, that it would not shy away from investing in phase 11 or in Iran as a whole, especially since the 25-year-old was just at it Expand agreements with the country, "said the Iranian source.

Indeed, aside from the massive geopolitical importance of Iran (and its close ally Iraq) to China, the 25-year deal means that Chinese companies will get the first option, an offer for, from China in exchange for at least $ 400 billion Surrender all new - or stalled or unfinished - oil, gas and petrochemical projects in Iran. China will also be able to purchase all oil, gas and petrochemical products at a guaranteed minimum discount of 12 percent on the six-month moving average price of comparable reference products, plus an additional 6 to 8 percent of that metric for a risk-adjusted fee.

In addition, China will be able to pay in soft currencies resulting from doing business in Africa and the countries of the former Soviet Union, which, given the exchange rates, means that China is considering a further discount of 8 to 12 percent, which means a total discount of around 32 percent on all purchases of oil gas and petrochemicals for China.