News Letter

Justine Salam / Hany Besada

SBE, Vol.20, No.1, 2017

ISSN 1818-1228

Qatar University

on 43 projects worth $8 billion

. In January

2001, Sinopec and the National Iranian Oil

Company (NIOC) signed an agreement to

exploit Zavareh-Kashan oil field, and Sinopec

took charge of the operation. Simultaneously,

the two companies also signed an agreement

worth $150 million to upgrade two NIOC

refineries

. On December 9, 2007, Sinopec

signed an agreement with the Iranian Ministry

of Oil to develop the Yadavaran oil field in

southwestern Iran, which turned out to be one

of the most significant deals that China signed

with Iran so far.

China also applied its equity ownership strategy

in Iran through Sinopec who holds a 51% equity

share of the Yadavaran field. As a side note,

the field is supposedly the largest untapped oil

field in the world, with an estimated oil reserve

of over 300,000 million barrel of crude oil. By

2009, Iran provided 11% of China’s oil import,

ranking third after Saudi Arabia and Angola.

According to Chubin

, Chinese oil companies

have signed long-term contracts with Iran worth

$200 billion. More than a hundred Chinese

companies are currently operating in Iran’s

oil and gas facilities. The essence of Sino-

Iranian relations comes from the abundance

of Iranian oil and gas reserves, associated

with Western withdrawal from Iranian markets

and economic sanctions. China simply moved

into the economic vacuum created by U.S.

policy,

which helped Iran obtain a reputation

of “reliable supplier,”

weakening the impacts

of sanctions, and allowing Iran to create new

bonds with China.

77 (Hongtu, 2010. Pp 21

78 Olimat Muhammad S., China and the Middle East:

From Silk Road to Arab Spring,

Reprint Edition, NewYork,

Rougtledge, 2015. Pp. 56

79 Chubin .2010 pp. 31

80 Alterman.2008. Pp. 21

81 Chubbin (2010), pp. 65-66.

Iran’s Nuclear Program and International

Sanctions

The Sino-Iranian relationship has worried

many actors in the region. Giving the lack of

trust between the Kingdom and Iran, Saudi

Arabia is concerned about the current state

of affairs between China and Iran. Thanks to

China’s growing investment in hydrocarbons,

it is evident that Chinese companies have

successfully obtained several oil contracts

in Iran, strengthening the ties between two

countries. However, Beijing has been cautious

in its approach towards Tehran: China’s foreign

policy is driven by commerce and China has

carefully separated its oil interests from rising

nuclear concerns in Iran

. As suspicions rose

regarding Iran’s potential nuclear programs,

China’s support for Iran became a significant

source of conflict in U.S.-Sino relations in the

1990s. Later on, as confrontation with Iran

intensified in 2004, Washington pressured

Beijing to cease its cooperation with Iran on

the Yadavaran oil field. In 2005, when the

International Atomic Energy Agency (IAEA)

determined that over a period of eighteen

years, Iran had conducted nuclear activities

without reporting them, China attempted to

delay and soften U.S. measures against Iran.

In particular, China opposed U.S. efforts to

send the matter to the United Nations Security

Council and insisted that the IAEA was the

adequate venue for dealing with the issue. In

2006, China repeatedly urged Iran to respond

“positively” and “flexibly”

to the proposals

made by the European Union or Russia.

However, when Iran declared that it would

continue uranium enrichment and ignored the

deadline specified in Resolution 1696, China

finally agreed to join the other permanent

82 Feng

.2010.Pp

83 Alterman & Garver, The Vital Triangle, China, The

United States and the Middle East, CSIS,Centre for

Strategic and International Studies, Washington DC. 2008,

Pp 43.