“Iran hopes new Chinese refinery investments will curb effects of sanctions”

“Iran hopes new Chinese refinery investments will curb effects of sanctions”
July 11-16, 2009
     Iran is pursuing a $40-billion deal for Chinese investments in its refineries as part of a 20-year plan calling for over $130 billion in total investments to revitalize Iran’s oil sector. Tehran is offering incentives including a 5% discount on crude oil fed to the refineries, an 8-year tax exemption, and options for the investors to raise their equity holding by up to 80% or more in all new and existing refinery projects. The deal would be China’s first investment in Iran’s refining sector (Tehran Times, Reuters).
     Vivienne Walt outlines how Chinese investments in Iran’s troubled energy sector could mitigate the effects of international sanctions. Iran, which relies on gasoline imports despite having vast oil reserves, hopes Chinese investments in its underdeveloped refineries could mitigate the effects of potential sanctions on gasoline imports. China has already signed several multibillion-dollar deals to develop Iran’s oil and gas reserves, including part of the South Pars gas field that was initially awarded to French company Total [previously covered here]. Walt believes China will continue expanding its porfolio in Iran while also blocking harsher UN sanctions (Time).
Tehran Times | Reuters | Time

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