Cablegate: China/Energy: Sinopec Says No Iran Deal Finalized,

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RR RUEHAG RUEHBC RUEHCN RUEHDE RUEHDF RUEHDIR RUEHGH RUEHIK RUEHKUK
RUEHLZ RUEHROV RUEHVC
DE RUEHBJ #4780 3601105
ZNR UUUUU ZZH
R 261105Z DEC 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC 3352
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUCNIRA/IRAN COLLECTIVE
RUEHIL/AMEMBASSY ISLAMABAD 6495
RUEHKL/AMEMBASSY KUALA LUMPUR 2417
RUEHMO/AMEMBASSY MOSCOW 8511
RUEHNE/AMEMBASSY NEW DELHI 4259
RUEHNY/AMEMBASSY OSLO 0855
RUEHUNV/USMISSION UNVIE VIENNA 1137

UNCLAS BEIJING 024780

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EAP/CM AND EB/ESC SIMONS
DOE OIC FOR PUMPHREY, OEA FOR CUTLER

E.O. 12958: N/A
TAGS: ETTC ECON ENRG EINV EPET PREL IR CH
SUBJECT: CHINA/ENERGY: SINOPEC SAYS NO IRAN DEAL FINALIZED,
STILL IN NEGOTIATION STAGE

SUBJECT: CHINA/ENERGY: SINOPEC SAYS NO IRAN DEAL FINALIZED,
STILL IN NEGOTIATION STAGE

REF: A) SECSTATE 194960, B) BEIJING 15609

1. (SBU) Summary: Sinopec Director-General for Foreign
Affairs Tang Suxin stated that contrary to Iranian press
reports, Sinopec,s business cooperation with Iran on the
Yadavaran Oilfield is currently at the contract negotiation
stage. Iran was making propaganda to suit its own purposes,
he added. Tang went on to say that Sinopec, in general, is
not interested in product sharing agreements (PSA) with Iran
as they are considered too risky. End summary.

No Sinopec-Iran Deal Completed, but Negotiations Continue
--------------------------------------------- ---

2. (SBU) In a December 21, 2006 meeting, Sinopec
Director-General for Foreign Affairs Tang Suxin told Economic
Minister-Counselor that he was aware of press reports as far
back as three weeks ago concerning a potential deal between
Sinopec and Iran. He consulted with several offices within
Sinopec and concluded that Iran was &making propaganda to
suit its purposes.8 Sinopec,s position is largely
different from these Iranian reports, he continued. While
there is business cooperation with National Iranian Oil
Company, any further cooperation on full-scale investments in
Iran's Yadavaran Oilfield is still at the contract
negotiation stage. The discussions have not been finalized,
he emphasized.

3. (SBU) Econ M/C asked whether Sinopec was now considering
going beyond the services contracts described by Vice
President Zhang Yaocang in ref. b. Tang said that he did not
have total investment figures on hand and noted that it is
hard to know what constitutes an investment an even harder to
quantify the total. The Gamsar project is just a services
contract and Sinopec is not interested in the more risky
product sharing agreements (PSAs), he added.

Yadavaran Oil Field Deal and LNG Projects ) Linkage Unclear
--------------------------------------------- ------

4. (SBU) Econ M/C asked about the status of Sinopec,s
possible purchase of liquefied natural gas (LNG) from Iran.
Tang stated that he is not involved in the LNG negotiations
and didn't know exactly how this fit into the broader
Yadavaran negotiations. However, he stated his view that
developing LNG capacity in Iran would benefit China and all
other consuming nations.

UNSCR and Sinopec Negotiations
------------------------------

5. (SBU) Responding to Econ M/C,s talking points addressing
United States, concerns that a Sino-Iranian oil deal at this
point in time would be especially unfortunate considering
pending action in the United Nations and the signal it would
send Iran, Tang noted that Sinopec is a responsible member of
the international community and would abide by relevant
international laws and decrees.

SEDNEY

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