Step 1: Concept
Alkaloids are classified based on the nature of their heterocyclic ring system.
Step 2: Meaning
Papaverine is one of the principal alkaloids found in Opium (Papaver somniferum).
Step 3: Analysis
While morphine and codeine are phenanthrene derivatives, papaverine and noscapine possess the benzylisoquinoline nucleus.
Step 4: Conclusion
Consequently, Papaverine is chemically classified as a benzylisoquinoline alkaloid.
Final Answer: (C)