Iran cancels $2.5B oilfield contract with China

|By:, SA News Editor

Iran says it is canceling a $2.5B deal with China National Petroleum (PTR) for the development of the South Azadegan oil field, complaining that China is delivering substandard quality and overcharging Iran and causing projects to be delayed.

Production for South Azadegan has been targeted at 600K bbl/day, but Iran says only seven of the originally planned 185 wells have been drilled so far.

China had stepped in after Western oil companies pulled out of Iran following Europe's ban on investing in the country, but the interim nuclear deal between Iran and the West has led it to be more assertive toward China.