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Total could lose its 50-1 percent stake in the South Pars offshore gas field in Iran if it pulls out of the country in case of new U.S. sanctions against Tehran, the managing director of state-owned National Iranian Oil Co. told the media yesterday. If this happens, the stake will be absorbed by Total’s partner in the project, China’s CNPC, Ali Kardor also said, as quoted by Bloomberg.
The French company, which is the only Western oil and gas major with a presence in Iran, has already poured US$90 million into the development of the South Pars field and has committed a total US$1 billion to the project.
Amid mounting concerns about the reimposition of U.S. sanctions against Tehran, in March Total’s CEO Patrick Pouyanne told The National that the company will seek a waiver. “If the U.S. decides to put back the sanctions, we have to look at what the consequences are ... and then we will see, either Donald Trump decides to maintain the waivers and we will move on with the project. If the U.S. decides not to sign the waiver ... we will ask for a waiver from the U.S. authorities,” he told the Emirati daily.
According to most observers, the return of the sanctions is all but certain, but whether Washington will grant the French company a waiver from them is anything but. After all, when Exxon asked for a sanction waiver to continue operating in Russia, it was denied one. If a U.S. supermajor could not win a waiver, what are the chances of a non-U.S. company getting on the good side of the Treasury?
The South pars field is the biggest gas deposit in the world, shared by Iran and Qatar. The 20-year development project, of which Total is a part of, envisages bringing gas production from the field to 2 billion cu ft of gas daily. NIOC’s head did not say whether Total would receive any compensation for its stake if it has to pull out of the project.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.