China state oil firm withdraws from USD 2 billion deal: Iran

In what appears to be China bowing down to US sanctions, Beijing's state oil company on Sunday pulled out of a USD 5 billion deal to develop of Iran's massive offshore natural gas field.

The South Pars field deal was signed in 2017 between China National Petroleum Company (CNPC), Iran PetroPars and France's Total SA. Notably, Total SA earlier withdrew in light of US President Donald Trump sanctions in 2018.

Iran Oil Minister Bijan Zangeneh said that the China National Petroleum Corp was "no longer in the project", reported Tasmin News Agency.

The minister did not give any specific reason for China's withdrawal. Moreover, CNPC has so far made no comment over the issue.

The pulling out of China comes at a time when Washington and Beijing are engaged in their trade war with levying tariffs and counter-tariffs on each other.

Iran holds the second-largest reserves of natural gas and the world's fourth-largest oil reserves.

According to the initial plan of development of South Pars field which is the world's second-largest known reserves of natural gas to build 20 wells and two two wellhead platforms, a project that would have a capacity of 2 billion cubic feet of natural gas a day, reported Al Jazeera.

Initially, Total SA was supposed to have a 50.1 per cent stake, with CNPC getting 30 per cent and the Iran firm Petropars getting 19.9 per cent.

With Total's withdrawal, CNPC had taken over the French firm's stake. Now, with CNPC exit, Petropars will develop the field alone, Zangeneh said.

( With inputs from ANI )