NIOC, Sinopec abort Garmsar joint contract

News ID: 3732921 -
TEHRAN, Aug. 06 (MNA) – An NIOC official announced that the development contract for Garmsar block with China’s Sinopec has been terminated due to environmental reasons.

Back in 2006, Sinopec (China Petroleum & Chemical Corporation) was announced as winner of development contract for Garmsar block, which was estimated to cost 50 to 70 million dollars.

Now after ten years, the deal with the Chinese firm has been brought to an untimely end due to lack of environmental permits.

An official at the National Iranian Oil Company (NIOC) has confirmed the cessation of the deal with Sinopec noting that “the deal was broken off following numerous negotiations and upon reaching consensus between both parties.”

He stressed that China’s Sinopec has carried out a number of its obligations, including conducting seismic activities in some areas; “however, due to non-issuance of necessary permits from the Environmental Protection Agency (EPA), full drilling of exploratory wells in Garmsar was not possible.”

The contract, which was sealed about 10 years ago, included such activities as drilling two exploration wells, two-dimensional seismography, preparing data related to previous seismographic operations as well as geological studies and staff training.

Simultaneous exploration and development in Garmsar block was planned to be carried over 12,183 square kilometers.

Under the terms of the 2006 exploration contract between Tehran and Beijing, the contractor was in charge of all exploration costs in the Iranian block including seismic survey, geoloical studies as well as drilling two exploratory wells.

It is worth mentioning that other development contracts between NIOC and Sinopec still hold effective as earlier in July, Executive manager of the Development Project of Yadavaran oilfield Hadi Nazarpour announced that Sinopec Company of China will take up second phase of the project for development of Yadavaran joint field.

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