Total's Gas Deal With SP Going Ahead Without Delay

Iran's landmark gas deal with French energy firm Total is moving ahead, Oil Minister Bijan Namdar Zanganeh said in a statement, lending confidence to the country's biggest energy contract since the lifting of sanctions in Jan. 2016.

Total signed a $5-billion deal in July last year to develop an offshore section of South Pars, the world's largest gas field shared by Iran and Qatar in the Persian Gulf.

However, US President Donald Trump's efforts to undermine Tehran's nuclear deal have sowed concern that Iran's improving economic relations with the world, including its partnership with Total, could face a setback.

"The gas deal with Total is moving ahead with no delay and all the subcontracts, except those related to drilling, are taking place," Zanganeh was quoted as saying by ICANA, the parliament's news service.

Trump on Friday waived US sanctions against Iran, a decision that should be taken every 120 days, but threatened it would be the last time he would suspend the sanctions unless European countries join the US to renegotiate the nuclear accord.

The prospect of new restrictions and fear of being punished for doing business with Iran could dissuade international companies from pursuing attractive opportunities in a market that opened up to foreign investment just two years ago.

The French company will collaborate with China National Petroleum Corp and Iran’s state-owned firm Petropars to produce 2 billion cubic feet, or 56 million cubic meters per day of natural gas from Phase 11 of the joint gas field.

Total Chief Executive Officer Patrick Pouyanne has said that Total could abandon the gas deal if new US restrictions prevent it from doing business with Tehran.

“If there is a sanctions regime [on Iran], we have to look at it carefully,” Pouyanne said in November. “We work in the US; we have assets in the US; we just acquired more assets in the US."

Iran has repeatedly said the Total-South Pars deal demonstrated the success of the nuclear deal, hoping that other major western and Asian firms would sign agreements with Iran.

source: Financial Tribune