Dryad In The News
Iran | China
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.