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IRAN/CHINA
Chinese refiner Sinopec has reportedly signed a memorandum of understanding with the National Iranian Oil Refining and Distribution Company covering an investment of some $6.5bn, which will be utilised to support oil refinery projects in Iran. According to a an official release, feasibility, profitability and land acquisition studies regarding the construction of the new refineries have been conducted and tenders will be held on engineering, procurement, construction (EPC) basis in the near future.
China is Iran’s second largest buyer of Iranian oil. As with Iran’s oil sales, the deal will be financed in euros. [Iran’s central bank announced in March 2007 that Iran had cut its holding of US-dollar assets to around 20% of its foreign reserves.] In spite of the investment, and growing demand at home for oil, Sinopec imported between 150,000 and 160,000 barrels per day (b/d) of Iranian crude this year, unchanged from 2008.
The investment by China’s oil major in Iran will cover the development of up to seven crude oil refineries, providing a combined 1.56m b/d capacity, which will double the country’s current output. The final investment requirement to fund the projects is estimated to be $23bn, though the release does not state where the balance of funds will be found. Iran now requires substantial foreign investment and technology to help develop its carbon resources. However, Western firms have become increasingly wary of investing in Iran, which is under UN and other sanctions because of a.....
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