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发帖数: 338 | 1 China and Iran flesh out strategic partnership
Staggered 25-year deal could mark seismic shift in the global hydrocarbons
sector
Iran's foreign minister Mohammad Zarif paid a visit to his Chinese
counterpart Wang Li at the end of August to present a road map for the China
-Iran comprehensive strategic partnership, signed in 2016.
The updated agreement echoes many of the points contained in previous China-
Iran accords, and already in the public domain. However, many of the key
specifics of this new understanding will not be released to the public,
despite representing a potentially material shift to the global balance of
the oil and gas sector, according to a senior source closely connected to
Iran's petroleum ministry who spoke exclusively to Petroleum Economist in
late August.
The central pillar of the new deal is that China will invest $280bn
developing Iran's oil, gas and petrochemicals sectors. This amount may be
front-loaded into the first five-year period of the deal but the
understanding is that further amounts will be available in every subsequent
five-year period, subject to both parties' agreement.
There will be another $120bn investment in upgrading Iran's transport and
manufacturing infrastructure, which again can be front-loaded into the first
five-year period and added to in each subsequent period should both parties
agree.
Chinese presence
Among other benefits, Chinese companies will be given the first refusal to
bid on any new, stalled or uncompleted oil and gasfield developments.
Chinese firms will also have first refusal on opportunities to become
involved with any and all petchems projects in Iran, including the provision
of technology, systems, process ingredients and personnel required to
complete such projects.
"This will include up to 5,000 Chinese security personnel on the ground in
Iran to protect Chinese projects, and there will be additional personnel and
material available to protect the eventual transit of oil, gas and petchems
supply from Iran to China, where necessary, including through the Persian
Gulf," says the Iranian source.
$280bn — Chinese investment in Iranian oil, gas and petchems sector
"China will also be able to buy any and all oil, gas and petchems products
at a minimum guaranteed discount of 12pc to the six-month rolling mean price
of comparable benchmark products, plus another 6pc to 8pc of that metric
for risk-adjusted compensation."
Under the terms of the new agreement, Petroleum Economist understands, China
will be granted the right to delay payment for Iranian production up to two
years. China will also be able to pay in soft currencies that it has
accrued from doing business in Africa and the Former Soviet Union (FSU)
states, in addition to using renminbi should the need arise—meaning that no
US dollars will be involved in these commodity transaction payments from
China to Iran.
"Given the exchange rates involved in converting these soft currencies into
hard currencies that Iran can obtain from its friendly Western banks—
including Europäisch-Iranische Handelsbank [in Germany], Oberbank [in
Austria] and Halkbank [in Turkey]—China is looking at another 8-12pc
discount [relative to the dollar price of the average benchmarks], which
means a total discount of up to 32pc for China on all oil, gas and petchems
purchases," the source says.
Another positive factor for China is that its close involvement in the build
-out of Iran's manufacturing infrastructure will be entirely in line with
its One Belt, One Road initiative. China intends to utilise the low cost
labour available in Iran to build factories, designed and overseen by large
Chinese manufacturing companies, with identical specifications and
operations to those in China, according to the Iranian source.
Transport infrastructure
The resulting products will be able to enter Western markets via routes
built or enhanced by China's increasing involvement in Iran's transport
infrastructure. When the draft deal was presented in late August to Iran's
Supreme Leader Ali Khamenei by Iran's vice president, Eshaq Jahangiri—and
senior figures from the Economic and Finance Ministry, the Petroleum
Ministry and the Islamic Revolutionary Guard Corps—he announced that Iran
had signed a contract with China to implement a project to electrify the
main 900km railway connecting Tehran to the north-eastern city of Mashhad.
Jahangiri added that there are also plans to establish a Tehran-Qom-Isfahan
high-speed train line and to extend this upgraded network up to the north-
west through Tabriz.
Tabriz, home to a number of key oil, gas and petchems sites, and the
starting point for the Tabriz-Ankara gas pipeline, will be a pivot point of
the 2,300km New Silk Road that links Urumqi (the capital of China's western
Xinjiang Province) to Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistan
and Turkmenistan along the way, and then via Turkey into Europe, says the
Iranian source.
The pipeline plan will require the co-operation of Russia, as it regards the
FSU states as its backyard. And, because, until recently, Russia was
weighing a similarly all-encompassing standalone deal with Iran. So,
according to the source, the agreement includes a clause allowing at least
one Russian company to have the option of being involved, also on discounted
terms, alongside a Chinese operator.
Benefits for Iran
The Iranians expect three key positives from the 25-year deal, according to
the source. The first flows from China being one of just five countries to
hold permanent member status on the United Nations Security Council (UNSC).
Russia, tangentially included in the new deal, also holds a seat, alongside
the US, the UK and France.
“[The deal] will include up to 5,000 Chinese security personnel on the
ground in Iran to protect Chinese projects”
"In order to circumvent any further ramping up of sanctions—and over time
encourage the US to come back to the negotiating table—Iran now has two out
of five UNSC votes on its side. The fact that [Iran foreign minister
Mohammad] Zarif showed up unexpectedly at the G7 summit in August at the
invitation of France may imply it has another permanent member on side," he
adds.
A second Iranian positive is that the deal will allow it to finally expedite
increases in oil and gas production from three of its key fields. China has
agreed to up the pace on its development of one of Iran's flagship gas
field project, Phase 11 of the giant South Pars gas field (SP11). China
National Petroleum Corporation (CNPC), one of China's 'big three' producers,
added to its 30pc holding in the field when it took over Total's 50.1pc
stake, following the French major's withdrawal in response to US sanctions.
CNPC had since made little progress developing SP11—a 30pc+ discount to the
global market price on potential condensate and LNG exports could change
that.
China has also agreed to increase production from Iran's West Karoun oil
fields—including North Azadegan, operated by CNPC, and Yadavaran, operated
by fellow 'big three' firm Sinopec—by an additional 500,000bl/d by the end
of 2020. Iran hopes to increase projected recovery rates from these West
Karoun fields, which it shares with neighbour Iraq, from a current 5pc of
reserves in place to at least 25pc by the end of 2021 at the very latest. "
For every percentage point increase, the recoverable reserves figure would
increase by 670mn bl, or around $34bn in revenues even with oil at $50/bl,"
the Iranian source says.
A final Iranian benefit is that China has agreed to increase imports of
Iranian oil, in defiance of a US decision not to extend China's waiver on
imports from Iran in May. China's General Administration of Customs (GAC)
figures released in late August show that, far from reducing its Iranian
imports, China imported over 925,000bl/d from the country in July, up by 4.
7pc month-on-month, from an already high base.
The actual figure is still higher, according to the Iranian source, with
excess barrels being kept in floating storage in and around China; without
having gone through customs they do not show up on customs data, but are
effectively part of China's Strategic Petroleum Reserve. |
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