The Oil Minister of Iran, Bijan Zangeneh announced that the Chinese National Petroleum Company (CNPC) has completely pulled out of the $5 billion contract for phase 11 of the Southern Pars gas field.

Zangeneh announced on Sunday that the phase 11 of the Southern Pars gas field will be fully developed by the state-owned Petropars Company.

According to Zangeneh, “the first jacket will be installed by the end of this year” and the drilling will begin after.

The Southern Pars gas field is in the Persian Gulf and it is shared between Iran and Qatar. Iran was hopeful that after the nuclear deal, work on the field could continue with the help of foreign contractors, but US exit from the deal and re-imposition of heavy sanctions on Iranian oil and banks has led to foreign companies giving up on investment in Iran.

After the Total company pulled out the Southern Pars gas field project, according to the contract, its share was transferred to CNPC, but during this time Iran repeatedly criticized the Chinese company for delaying the project.

Zanngeneh said about a year ago: “Although 81 percent of the contract for the phase 11 of the development of Southern Pars gas field has been officially transferred to CNPC, the company has not taken any steps to develop the project.”

The minister of oil also stated that Iran seeks to improve relations with all the countries in the Middle East and suggested joint projects with Saudi Arabia as a possibility.

He added: “We want to be friends with all the countries in the region. Our mutual enemy is outside of the Middle East. I don’t have any problem meeting with the Saudi Arabian oil minister.”