By Benoit Faucon
Top Iranian officials are traveling this week to Beijing to meet
executives at one of China's largest energy companies to discuss
oil projects after a political agreement to eventually lift Western
sanctions was struck, people familiar with the matter said.
The meetings with Sinopec Group, a state-owned Chinese company,
come as China is looking to secure its interests in Iran following
a tentative agreement last week with the U.S. and European powers
that could enable the return of major Western oil companies to the
world's fourth-largest oil patch.
They are also among the first signs that foreign companies are
moving to position themselves for Iran's opening up to the world if
sanctions over its nuclear program are lifted. Iran and the West
still must hammer out the final details of the agreement in
June.
The Chinese emerged as the last foreigners still willing to
carry significant investments in Iran's oil sector after European
companies such as Royal Dutch Shell PLC and Eni SpA pulled out in
2010 when sanctions were ratcheted up. But the Chinese "know the
landscape will soon be changing" with the potential arrival of
Western oil companies and want to secure their special relationship
with Iran, a person familiar with Sinopec's thinking said.
The Iranian delegation will include Oil Minister Bijan Namdar
Zanganeh and the deputy oil minister for international affairs,
Amir-Hossein Zamaninia. They plan to meet the management of
Sinopec, China's largest oil refiner, an Iranian official and
people close to Sinopec said.
Sinopec didn't respond to a request for comment.
The two sides are set to discuss the expansion of the Yadavaran
project--a Sinopec-operated oil field near the Iraqi border
currently producing 50,000 barrels a day, the people familiar with
the matter said.
Sinopec would like to expand output to 135,000 barrels a day but
has misgivings about the new proposed contracts offered by Iran to
carry the development, another person familiar with Sinopec's
thinking said. Iranian officials have discussed offering contracts
that allow foreign companies to recoup their costs but also require
them to work in joint ventures with Iranian companies.
The Iranian delegation will also discuss Sinopec's crude oil
needs but isn't expected offer specific amounts of extra crude oil
yet, the people said. Iran will wait for the sanctions to be lifted
before it decides on pricing and extra deliveries, an Iranian oil
official has previously said.
After Western sanctions were imposed, China became the largest
buyer of Iranian oil and its largest trade partner--with
transactions estimated at $44 billion in 2014, according to the
Iran-China Chamber of Commerce.
Brian Spegele contributed to this article.
Write to Benoit Faucon at benoit.faucon@wsj.com
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