Total threatens to 'back out' of South Pars 11 in Iran

Middle East: French oil big Complete could ditch Iran gasoline challenge over US sanctions menace

Middle East: French oil big Complete could ditch Iran gasoline challenge over US sanctions menace

Iran's Oil Minister Bijan Namdar Zanganeh said that if France's Total withdraws from the project to develop 11th phase of South Pars gas field, Chinese National Petroleum Corporation (CNPC) will replace it.

The agreement is the first between Iran and a key Western ally of the United States since Washington last week announced it will pull out of the landmark 2015 nuclear deal between Iran and Western powers.

Total's announcement comes after German insurer Allianz (ALVG.DE) and Danish oil product tanker operator Maersk Tankers said they were winding down their businesses in Iran.

Zanganeh's statement came after the French energy giant said that is preparing to pull out of the gas project in the face of renewed USA sanctions.

European Commissioner for Migration and Home Affairs Dimitris Avramopoulos, for his part, said that the EU is discussing "the possibility of applying our blocking statute" to protect the interests of European companies from the re-introduction of U.S. anti-Iranian sanctions.

Total holds a 50.1 per cent stake in the South Pars project.

The move follows President Donald Trump's decision to withdraw the United States from the worldwide nuclear deal with Iran (JCPOA) and to reinstate the USA sanctions that were in force before the deal's implementation.

Total said it was working with French authorities towards trying to secure a waiver for the South Pars project.

More news: Teacher suspended over 'relationship' with boy, 17, is shot dead in driveway
More news: Five Manchester City players join record-breaker Salah
More news: Neymar issues angry response to talk of Man Utd, Real Madrid switch

"The issue is that Iranian transactions can't be processed though any part of the banking system that needs access to the USA dollar", Gammel said.

In announcing his withdrawal from the deal, Trump warned companies that they face sanctions if they do business with Iran.

"The fines are in the multibillions these days so it's just not worth the risk for a small piece of business and maybe pleasing a (European) government".

"This project waiver should include protection of the company from any secondary sanction as per USA legislation. With that in mind it's a logical decision".

Total said it would not be making any further commitments towards the Iranian South Pars project for now, and added it was engaged with French and United States authorities over the possibility of a waiver to the project.

Siemens CEO Joe Kaeser told CNN this week that Trump's decision meant his company could not do any new business in Iran.

"SP11 is a gas development project dedicated to the supply of domestic gas to the domestic Iranian market and for which Total has voluntarily implemented an IRGC-free policy for all contractors participating in the project, thereby contributing to the global policy to restrain the field of influence of the IRGC".

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.