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Iran courts China for drilling rigs

June 20, 2013 at 6:36 AM   |   Comments

TEHRAN, June 20 (UPI) -- Iran announced plans to pay $850 million to secure 10 drilling rigs from Chinese manufacturers instead of domestic companies.

The Iranian government said it was working to decouple its economy from the oil and natural gas sector. The national currency, the rial, collapsed last year under the weight of Western economic sanctions targeting the energy sector.

Nevertheless, the North Drilling Co. of Iran said it was pursuing a deal with unnamed Chinese companies rather than domestic companies. The rigs would be delivered to Iran within the next two years, the semiofficial Mehr News Agency reported Wednesday.

The report said the move comes despite warnings from the Iranian Oil Ministry, which said domestic manufacturers should be favored when products are available on the Iranian market.

Mehr said in a separate report domestic companies were at an advantage because of sanctions imposed on Iran. Oil Minister Rostam Qasemi said deals with foreign companies would result in the removal of contractors from a government-backed list.

Sanctions were tightened by the U.S. Treasury Department in February in a way that it said would restrict Iran's ability to use oil revenue that may be held in foreign banks.

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