Baku, Azerbaijan, August 29
Trend:
All equipment and investment committed by Total in Iran's South Pars project will remain in the country despite the French energy giant's exit, said Asadollah Gharehkhani, the spokesperson for the Parliament's Energy Commission.
Gharehkhani said Total terminated a contract to develop Phase 11 of Iran's South Pars energy hub since the French energy giant started to feel that its continued presence in Iran would lead to a heavy loss for the company, Iran’s Iran Daily newspaper reported Aug. 29.
Total – with a leading share of 50.1 percent in the development of Phase 11 – announced two months ago that it was withdrawing from the project. CNPC has a 30 percent stake, while PetroPars holds the remaining 19.9 percent.
In July 2017, the NIOC (the National Iranian Oil Company) awarded the project to the trio through a contract worth around $4 billion.
Last week, the French oil and gas major confirmed that it had notified the Iranian authorities of its withdrawal from the multi-billion dollar project after it failed to obtain a waiver from US sanctions.
Gharehkhani said that the contract between Iran and Total included a paragraph that indicated in the event of Total's exit from the project, CNPC would replace the French company.
He noted, "All costs and equipment committed by Total [in South Pars project] will remain in Iran, and there is no contract on returning any of them."
Iran, he added, has given no guarantees to Total, either from the banking, public or private sectors that would allow the French company to ask for the return of its equipment and investment.
The United States reimposed stiff economic sanctions on Iran on August 6, ratcheting up pressure on the Islamic Republic despite statements of deep dismay from European allies, three months after President Donald Trump pulled the US out of the nuclear deal.
A first set of reimposed US sanctions affect financial transactions that involve US dollars, Iran's automotive sector, the purchase of commercial planes and metals including gold.
A second batch of US sanctions targeting Iran's oil sector and central bank are to be reimposed in early November.