Iran oilmin visits China for investment, trade talks

Iran oilmin visits China for investment, trade talks

Iran is China’s No. 3 supplier of crude.

August 4, 2010 10:57 by Reuters

Iran’s oil minister will meet officials from state-run Zhuhai Zhenrong Corp, the world’s top lifter of Iranian crude by company, during this week’s visit to China, which imported a third less oil from the OPEC producer in the first half, Chinese sources said on Wednesday.

The high-level economic team, which could include senior finance officials to seek investment in refineries and discuss trade, comes shortly after the EU agreed tougher sanctions on Iran, including action to block oil and gas investment as well as squeezing its ability to import gasoline.

Oil Minister Massoud Mirkazemi will be accompanied by the head of the National Iranian Oil Company, the oil ministry’s website SHANA reported on Tuesday.

Zhuhai Zhenrong has been notified of a meeting with Iranian oil officials, said one Zhenrong official, who did not have further details.

Another industry executive said Mirkazemi may be travelling with officials from other government agencies such as the railway sector and accompanied by a deputy finance minister.

“Iranians used to visit here minister-by-minister with very little coordination among themselves and couldn’t get anything done,” said the official with a Middle East investment firm that deals with Iranian businesses in Beijing.

“Now they’ve decided to let a deputy finance minister lead and bring people here in one go,” said the executive, who was approached this week to find Chinese investors to build a $7 billion electric rail system in Iran.

China signed up for the latest round of UN sanctions on Iran in June, but has condemned subsequent unilateral U.S. and EU restrictions that specifically target Iran’s energy sector. The sanctions are designed to further isolate Iran from the global financial system and hinder investments in a wide range of sectors including its dilapidated refining industry.

Though China bought 30 percent less crude oil in the first half of this year versus a year earlier, Iran remained the country’s No. 3 supplier of crude, Chinese customs figures showed.

China has also been one of the major gasoline suppliers into Iran this year, replacing other fuel suppliers such as Western trading houses Trafigura, Vitol and Russian firm LUKOIL, as they stopped sales for fear of U.S. retribution.

The two nations are also exploring the idea of using the Chinese yuan to settle oil trade and as payment for infrastructure projects. China is wary however that the shift could carry significant political risk.

China’s state oil giants CNPC and Sinopec Group are both drilling oil and gas wells in Iran under billion-dollar pacts. Sinopec’s engineering arm, Sinopec Engineering Group, has in the past few years also helped to build Iran’s refineries, said a company official.

(Reporting by Chen Aizhu; Editing by Ramthan Hussain)