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Mon 30 Apr 2007 02:33 PM

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China's Sinopec to visit Iran next week

Energy group hopes to address outstanding issues on the deal to develop Yadavaran oilfield.

A delegation from China's Sinopec energy group will visit Iran next week to discuss outstanding financial issues on a deal to develop the Yadavaran oilfield, a senior Iranian official said on Monday.

Gholamhossein Nozari, managing director of the National Iranian Oil Company (NIOC), told the ISNA news agency the two sides were still negotiating the return which Sinopec should receive on its investment in the field.

Yadavaran, in southwest Iran, is expected to produce 300,000 barrels per day, about the same amount Iran now exports to China. Iran is China's third largest oil supplier after Saudi Arabia and Angola.

"After the last round of negotiations with the Sinopec company for developing the Yadavaran field, all items of the contract have been finalised except the discussion over the rate of return," Nozari was quoted as saying.

Nozari, whose comments were also carried on the Oil Ministry's web site SHANA, said Royal Dutch Shell Plc was interested in participating in the development of Yadavaran.

"The National Iranian Oil Company can sign a contract with Shell and Sinopec as a joint company or it can sign the contract with Sinopec and Shell can enter negotiations with Sinopec," SHANA quoted Nozari as saying.

His statement comes at a time of increased international pressure on Iran over its nuclear programme, which the West fears is aimed at making atom bombs, a charge Tehran denies. The United States has urged its allies not to invest in Iran.

Sinopec Group, China's second-largest state-run oil and gas firm, agreed in October 2004 to take the lead in developing Yadavaran and to buy 10 million tonnes of liquefied natural gas (LNG) a year for 25 years.

Completion of the deal, like other Iranian energy contracts with foreign firms, has been subject to protracted negotiations and several delays.

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