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The Wall Street Journal: PRESSURING IRAN

January 15, 2007

Further ignoring pressure from the U.S. after Beijing warned Washington not to meddle in its trade relations with Iran, China’s biggest oil company is set to deepen its involvement in Iran’s energy sector through a $3.6 billion liquefied natural-gas project. National Petroleum Corp. is finalizing a memorandum of understanding with Iran’s oil ministry to invest the sum in developing Iran’s South Pars natural-gas field.

Washington fears that China’s dealings in Iran, which have seen PetroChina Co. and Cnooc Ltd. negotiate big LNG deals recently, could hurt international efforts to pressure the Islamic republic to abandon its nuclear program. Last week, Washington raised concern over plans by Cnooc to invest $16 billion on developing Iran’s North Pars field and building LNG facilities.

Chinese oil firms aren’t alone in targeting Iran’s natural-gas reserves, which are the second-largest in the world. In addition to France’s Total SA, other Western oil companies to have invested in the country include Royal Dutch Shell PLC and Spain’s Repsol YPF SA. Last month, Australia’s Liquefied Natural Gas Ltd. won approval from National Iranian Oil Co. for a gas-supply agreement. A spokesman for Australian Trade Minister Warren Truss noted at the time that Australia has no bilateral sanctions against Iran.

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