Iran will sign a contract with China National Petroleum Corporation (CNPC) for the development of Phase 11 of the giant South Pars gas field in the Gulf, replacing France's Total – the world's fourth largest oil and gas company, the official Irna news agency reported.
Total said it considered the report to be a market rumour. "And the company does not comment market rumours," said a Total spokeswoman in Paris.
The agency said the contract would be signed in Beijing by an Iranian delegation headed by Seifollah Jashnsaz, Managing Director of the state National Iranian Oil Company (NIOC).
South Pars, the world's largest reservoir of gas, is shared by Iran and Qatar. The Iranian part is divided into 24 phases.
"Jashnsaz, leading an oil and gas delegation, has travelled to China for final negotiations on the Chinese investment in the development of South Pars Phase 11 and the signing of the contract," Irna said, without giving a source.
"Signing of the co-operation contract between Iran and China will take place as [China's CNPC] has replaced the French company Total in this project," it said.
Total has a memorandum of understanding with NIOC to develop Phase 11 of South Pars but the project has been overshadowed by haggling over contract terms.
In March, Jashnsaz said Total had wasted time in work on the phase and a new partner would enter the project with a "leading share". He did not then name the new partner.
In April, Total's Chief Executive Christophe de Margerie said it saw the investment terms offered by Iran for developing gas fields as "not attractive enough".
Earlier in 2009, the Paris-based company had said it did not expect to sign an agreement on South Pars anytime soon.
The US and the UN sanctions on Iran over its nuclear programme, as well as political pressure from Washington, have stopped Western energy companies for signing up new deals to exploit the world's second-largest oil and gas reserves.
Iran is drawing interest from Indian and Chinese firms seen as less susceptible than many other companies to such Western pressure over Tehran's disputed nuclear work.
Iran said on Sunday it planned to issue $12.3 billion (Dh45bn) of foreign currency and rial-denominated bonds over the next three years to help finance the development of South Pars. Investment for remaining projects at the fields would be around $50bn. Iran is the world's fifth-largest oil exporter.
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