Iran signed a $2bn worth of oil contract with China's Sinopec of China yesterday. The contract to partly develop the giant Yadavaran onshore oil field in south-west Iran is one of the biggest Tehran has ever signed and is the first with a Chinese company.
Iran sits on the world's second largest oil and gas reserves but it has not been able to attract enough investment for its development projects, fuelling fears it might face an energy crisis in less than a decade.
Yadavaran is estimated to contain 12bn-18bn barrels of oil. The contract involves production of only 85,000 bpd by the time the field is developed in four years. The second phase, for development of the huge oil field to produce another 100,000 bpd, will be decided later.
Sinopec is obliged to give 51 per cent of its sub-contracts to Iranian companies.