Chinese Companies Turn Focus to Conventional Oil Assets
OREANDA-NEWS. September 14, 2011. Iran is not concerned about a curb on Chinese investments in its vital energy sector, its foreign minister said.
China has put the brakes on oil and gas investments in Iran, drawing ire from Tehran over a pullback that officials and executives said reflected Beijing's efforts to appease Washington and avoid U.S. sanctions on its big energy firms.
On a visit to U.S. ally Pakistan to discuss energy, agriculture and banking ties, Iranian Foreign Minister Ali Akbar Salehi sought to play down China's apparent shift in Iran.
"The Chinese are very active in Iran. There may be one project or two projects that may have (been reported) in the media," said Salehi.
"One or two projects may be slow but that is no problem."
The stakes are high for OPEC's second-largest producer Iran, as China is one of the only players on the international political stage capable of providing the billions of dollars of investment Tehran needs to maintain the capacity of its strategic oil sector.
Four energy executives in Beijing described retreats and slowdowns of Chinese ventures in Iran in recent months, even as China has bought more crude from its Middle East partner, which leans on Beijing for backing and investment to counter sanctions over its disputed nuclear plans.
The slowing of China's energy investments in Iran was prompted, at least partly, by Beijing's efforts since late 2010 to ease tension with the Obama administration and cut the risk of Chinese oil firms being hit by U.S. sanctions that Congress has vigorously backed, said officials.
President Barack Obama and key members of his cabinet have pressed Beijing to do more to help rein in Iran's nuclear activities, and Vice President Joe Biden raised the issue during his recent visit to China, White House spokeswoman Caitlin Hayden told.
Beijing has worked to ensure United Nations sanctions on Iran do not imperil its energy investments and oil and gas purchases.
But unilateral U.S. sanctions could be invoked to punish Chinese firms with operations in the United States for their work in Iran. The Obama administration has avoided taking that step, mindful that such a move is likely to anger Beijing.
Western powers believe Iran is using its nuclear program as a means to build weapons. Tehran says it needs nuclear-generated electricity.
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