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French Total is waiting for an extension of the waiver on U.S. sanctions against Iran before it makes the final decision on a US$2.2-billion investment in a gas project in the country, according to chief executive Patrick Pouyanne.
Pouyanne told media in Paris that the waiver, first introduced by President Obama, should be renewed before this summer and should last for another 18 months. He noted that the new administration in Washington would have to provide proof of Iran’s breach of the 2015 agreement with Western powers in order to avoid extending the waiver.
Trump’s administration has already taken steps towards Iran that have sparked concern about bilateral relations and oil supply from OPEC’s third-biggest oil producer. Following ballistic missile tests last week, Washington quickly put Iran “on notice,” introducing sanctions targeting certain individuals and entities related to Iran’s Special Forces – the Revolutionary Guards.
Total’s CEO further said that Trump’s only other option to presenting proof of a breach is to tear up the nuclear deal – which he has said he would do. This move would interfere with the French company’s plans for the South Pars 11 project – part of the biggest gas field in the world. “In that case, we'll not be able to work in Iran,” Pouyanne said.
Related: Are These OPEC Members Sabotaging The Output Deal?
Total earlier this week reported a 22-percent increase in annual profits for 2016 to US$6.2 billion, with the adjusted figure at US$8.3 billion, down 21 percent on 2015 but still strong. The result beat expectations and motivated the company to switch into “offensive” gear, as announced by Pouyanne.
The company plans to invest in 10 new projects in the next 18 months, including a deepwater project in Brazil, and new undertakings in Nigeria, Argentina, and Uganda.
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.