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The chances of France’s Total obtaining a U.S. waiver from the returning sanctions on Iran are not good, Total’s chief executive Patrick Pouyanné told the shareholders’ meeting on Friday.
“The probability of us getting an exemption is very slim”, AFP quoted Pouyanné as saying to shareholders today.
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 U.S. pulled out of the Iran nuclear deal and announced sanctions are returning, Total, like many other companies doing business in or with Iran, is 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.”
Related: Iran Shouldn’t Count On OPEC For A Bailout
“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.
Total’s actual spending to date on the South Pars 11 contract is less than US$47 million (40 million euros), it said.
Earlier this week, Iran’s Oil Minister Bijan Zangeneh said that Total had 60 days to secure a waiver from the returning U.S. sanctions on Iran in order to stay in the South Pars project. If Total abandons the South Pars project, it would be replaced by China’s CNPC, the Iranian minister said.
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.