China's state oil firm pulls out of USD 5 billion deal with Iran

In an apparent pressure from the US, China’s state oil company withdrew from a $5 billion deal on October 6 to develop a portion of Iran's massive offshore natural gas field. The South Pars field deal, a tripartite deal signed in 2017, was struck between China National Petroleum Company (CNPC), Iranian PetroPars and France's Total SA. The French company had already pulled out of the deal in 2018 after US President Donald Trump announced sanctions on Iran.

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Reason behind withdrawal not revealed

Iran Oil Minister Bijan Zangeneh said that China National Petroleum Corp was ‘no longer in the project’ quoted an Iranian news agency. The ministry has not revealed the reason behind the decision and CNPC made no comment about the issue. However, Iranian Foreign Minister Mohammad Javad Zarif told a parliamentary committee the problems in the field of investment are an outcome of the US “maximum pressure policy”.

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Trump's call to bring more sanctions on Iran

Recently, Trump had called on the countries around the world to bring more sanctions on Iran and to tighten the noose around Iran’s economy. Trump, at the 74th session of the United Nations General Assembly (UNGA), had said that no responsible country should subsidize Iran’s “blood lust”.  'We must stop Iran's path to nuclear weapons, hence I dropped out of the nuclear deal,” he had said. “The regime's record of death and destruction is well known to us all. Not only is Iran the world's number one state sponsor of terrorism, but Iran's leaders are fuelling the tragic wars in both Syria and Yemen. And at the same time, the regime is squandering the nation's wealth and future in a fanatical quest for nuclear weapons,” Trump had lambasted Iran.

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The US-China trade war

The development comes when the US is in a trade war with China and Trump had openly criticized it for ‘unfair trade practices’ at the UNGA. Trump had also blamed China for theft of intellectual property and trade secrets on a "grand scale". “It has embraced an economic model, dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of the intellectual property and also trades secrets on a grand scale,” he said at the UNGA. "As far as America is concerned, those days are over,” Trump had said. The equation of US-Iran-China seems to have an impact on the recent decision of the Chinese firm to pull out of the deal.

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(With Inputs from Agencies)