French oil and gas major Total has officially left Iran due to the threat of secondary sanctions from the United States if it were to continue to do business with Tehran, Iranian state television reported on Monday, citing oil minister Bijan Zanganeh.
Total has quit the project to develop South Pars Gas phase 11, and the process to find another company to replace it is underway, according to Zanganeh.
Last year, Total became the first supermajor to have returned to Iran after the previous sanctions were lifted, with the multi-billion-dollar South Pars 11 gas development project.
But after the United States pulled out of the Iran nuclear deal and announced that sanctions were returning, Total, like many other companies doing business in or with Iran, has been concerned about being exposed to secondary U.S. sanctions if they continue operations in Iran.
After the U.S. withdrawal from the Iran deal, Total said that 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.”
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“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.”
Last month, France’s Finance Minister Bruno Le Maire told French newspaper Le Figaro that the United States had rejected a request from France for waivers for French companies operating in Iran.
Until a week ago, Iran was saying that Total was still part of the South Pars contract, and if the French major pulls out, China’s CNPC would take over its share in the project.
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.