China National Petroleum Corp, one of the country's oil giants, has been invited to bid for Iran's crude and natural gas development projects as the Persian Gulf state seeks investments in energy.
CNPC, together with 28 other oil companies including Total SA, Royal Dutch Shell Plc and PJSC Gazprom, are among the international companies that have qualified to bid for tenders, according to Iran's oil ministry.
If CNPC wins, the deal would be in the interests of both countries, reviving Iran's energy industry which has been hard hit by international sanctions while satisfying China, the world's second-largest economy, which has strong energy demand.
Iran is trying to fast-track projects to boost oil and gas production amid low prices and wants to sign agreements as soon as possible.
However, Alastair Syme, an oil analyst at Citigroup Inc in London, warned companies to be wary of investing too quickly or too much in Iran.
According to a senior engineer with CNPC, despite years of sanctions leading to a hammered economy and infrastructure, Iran, with the world's biggest natural gas reserves, estimated by BP Plc at 34 trillion cubic meters, still has significant strategic importance, with its substantial reserves of oil and gas.
Strategically located in the Middle East and sharing land borders with 15 nations, Iran also plays a crucial role in the Belt and Road Initiative as an energy hub, he said.
According to CNPC, the company has been present in Iran since 2004 and is engaged in oil and gas operations and oilfield services.
In 2009, the company signed contracts with National Iranian Oil Co to develop the North Azadegan Oilfield and the Phase 11 of the South Pars gas field, which began trial production in 2015.
Iran exported 500,000 to 600,000 barrels of crude oil per day to China in 2015, and the country recently signed a $4.8 billion natural gas development project with CNPC and Total.
Iran aims to attract more than $100 billion in foreign investment to boost the country's energy sector. Iran has doubled its exports as crude prices rallied.
Iran boosted oil output in 2016 by 870,000 barrels per day to 3.67 million bpd by November, and has reached several preliminary agreements with international companies, despite no concrete deals having been signed yet, Bloomberg said.
The country has set a target of daily output of 5.7 million bpd of crude and condensate early in the next decade, according to Oil Minister Bijan Namdar Zanganeh.
