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State-controlled China National Petroleum Corporation (CNPC) is replacing French oil and gas major Total in Iran’s multi-billion-dollar South Pars gas project, Iran’s semi-official news agency ICANA quoted Oil Minister Bijan Zanganeh as saying.
Last year, Total became the first supermajor to return to Iran after the previous sanctions were lifted, with the multi-billion-dollar South Pars 11 gas development project.
But after the U.S. withdrawal from the Iran nuclear deal, Total said in May that it would not be in a position to continue the South Pars 11 gas project and would have to unwind all related operations before November 4, 2018, “unless Total is granted a specific project waiver by the U.S. authorities with the support of the French and European authorities. This project waiver should include protection of the Company from any secondary sanction as per US legislation.”
“Total has always been clear that it cannot afford to be exposed to any secondary sanction, which might include the loss of financing in dollars by US banks for its worldwide operations,” the French company said a week after the U.S. withdrawal from the Iran deal.
In early June, Total’s chief executive Patrick Pouyanné said that the company’s chances of securing a waiver were “very slim.”
In August, Iran said that Total had officially left Iran due to the threat of secondary sanctions from the United States if it were to continue to do business with Tehran.
Now Oil Minister Zanganeh said that CNPC had officially replaced the French major in the South Pars 11 project. The Chinese state firm, however, has not started work on the project yet, as Iran has yet to hold talks with CNPC about when operations will begin, the minister added.
Before Total quit Iran, the French company had 50.1 percent in the project and was its operator, while CNPC owned 30 percent, and Petropars—a wholly owned subsidiary of the National Iranian Oil Company (NIOC)—held the remaining 19.9 percent.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.