CNPC says keen to continue cooperation with NIOC

SHANA- China National Petroleum Corporation is interested to take more projects in Iran and to promote cooperation with National Iranian Oil Company in the future, CNPC senior official said.

CNPC Project Director Cheng Zhongliang made the remarks in an exclusive interview with Shana.

It is China’s largest oil and gas producer and supplier, as well as one of the world’s major oilfield service providers and a globally reputed contractor in engineering construction. It has presence in almost 70 countries.

This Chinese company has been a major partner of Iran in development of its oil gas fields which continued cooperation with Iran even at the sanctions period. It developed the first phase of North Azadegan joint oil field and is in talk with Iran to develop the second phase of this field.

CNPC and France’s Total have signed recently a Heads of Agreement with Iran’s Petropars company to develop of phase 11 of South Pars gas field.

Full text of interview follows:

**Please explain the current status of the North Azadegan Field and the latest achievements?

The North Azadegan Field is the biggest project we had in Iran and finally we put it into production after years of hard working.

The quality of production in the field is high and its quality have been verified in a 21-28 test which was just finished early morning zero o’clock today(November 9). In 21 days of the 28 days, there was no problem.

**CNPC inked a contract with Iran in 2009, why the company could not accomplish the job without delay?

First, we strictly kept the Health, Safety and Environment (HSE) Policy and therefore, we had been awarded by the local officials for being good in protecting the field environment during these years.

Since the North Azadegan Field has been located on the border, there are lots of mines, explosives and big palms and we had to demine the mines first and prepare the ground for work.

In the meantime, the field was marsh land which caused lots of difficulties for working in the field.

The second reason was sanctions; for some designs, we needed some materials and equipment that we could not get, so that we had to redesign all the parts again.

And also some materials, even at the beginning, we were supplied but at last point, some had been transported to the port and due to the sanctions, it was said that they can not give them to us, therefore, we had to purchase them from other available companies. This also was .time consuming

Transferring money was another problem; some companies could not take their money on time.

**Why the operation in the North Azadegan went very fast when the CNPC was expelled from the South Azadegan field,?

In the past three years, we had a more efficient approach because both sides found their way and learned how to overcome the difficulties that they had to face and they found how to speed up the projects.

At the beginning, we did not know each other but as much as we came closer, the project speed up.

**How do you see working in Iran in compare to other countries?

Another time consuming issue was taking approval from the Iranian officials for every part of the project in comparison with Iraq.

In Iraq, in a 20 million US dollar project we did not need government approval and we just followed our company procedure to push the work but here in Iran, we were questioned many times and it was time consuming.

Other problem was that some parts of the land we were working on belonged to local people and we had to reach agreement and to resolve disputes regarding the land acquisition.

According to the schedule, we planned to put the project into production at July last year but the pump station in West Karun was not ready and this was also another problem that caused one year more delay in exploiting the North Azadegan project.

How much CNPC tried to train the Iranian partner?**

We provided all the documents related to the knowledge of the project from the beginning. CNPC provided the Iranian side with maps, geology studies documents and how to design and manage the project software. CNPC spent a lot of money for training the Iranian people.

Are you satisfied with working with the Iranian people?**

I am very pleased about working in Iran and I have been here for seven years.

**How do you see the prospect of CNPC cooperation with Iran in the post-sanction era especially regarding the negotiations on second phase?

Working in the phase second will be much better because we have several years experience of working together. We know each other and we know how to work much better than before.

**Why negotiations on second phase have become so much long?

We have already given the technical and commercial proposal to Iran’s Petroleum Engineering and Development Company (PEDEC). In this regard, the deputy managing director of NIOC, Mr Manouchehri had a meeting with CNPC top officials in Beijing that was a very constructive meeting.

We are waiting for the Iranian team to come to china to discuss together and to finalize the technical part of the Master Development plan and after that we can finalize the commercial part and then sign the contract.

**When you think, CNPC will start working on the second phase?

We have given the technical proposal for doing the second phase to Iran and we are ready to sit together and finalize it. It depends on the Iranian side and we can not predict a time.

**How do you see the prospect of Iran-CNPC cooperation regarding the trilateral agreement reached between Total, NIOC and CNPC recently?

The cooperation document was a very good Heads of Agreement. By the presence of more partners we can learn from each other and I think this is a beginning for Iran and with time going, more contracts will be signed between Iran and foreign partners and more foreign companies will come here.

**What is your idea about the new models of Iran Petroleum Contracts?

I think IPC has not been already finalized and we have not already taken any detail from the related government officials and there is just a framework. The name of contract is not important but the content is main issue. A good contract should ensure the interests of both investor and the owner of project. The important aspect of a good contract is that it should provide a win-win situation for all sides.

Iran should provide far more attractive contracts to absorb foreign investment and encourage the foreign companies to come here.

**How do see the government approach in case of working with foreign companies?

The Iranian Petroleum Minister Bijan Zangeneh is very positive and we had a meeting with him and we presented our program to him and he was very helpful and he is a very good minister.

Iran and china have good relation and they have always supported each other. From the government level, there was a very positive view in Tehran towards cooperation with Beijing.

**China is Iran’s strategic partner, if the sanctions are returned, what will be the CNPC reaction?

In the past years during the sanctions era, we were always here and I think this is the answer to your question.

**Are the European companies your rival for working in Iran?

Actually, we don’t suppose the Europeans as our rivals but they are our partners just like Total. CNPC has also joint cooperation with other European companies in other countries.

CNPC have several huge projects in Iraq and one is with British Petroleum, the other is with Exxonmobile and also there are other projects with Total.

**You have been in Iran for seven years, what is your idea about continuing the work here?

There are good historical relations between Iran and China. I have worked here for seven years. I got more information of Iranian history, politic, culture during my stay in Iran.

I have now lots of Iranian friends. The Iranian people are very friendly. I feel Iran is my hometown. The Iranians are like my sisters and brothers.

**Do you like continuing the work in Iran after seven years being here?

We are interested to take more projects in Iran and to cooperate with NIOC in the future. I see a good future for the projects that have been given to the Chinese companies.

Interview by Negar Sadeqi, Hamdollah Emadi Heydari