Total halts $2 billion gas project in Iran

Galtero Lara
May 16, 2018

French oil major Total warned on Wednesday it will abandon a major gas field project in Iran unless it is exempt from United States sanctions against Tehran.

Trump's decision to withdraw from the 2015 nuclear deal with Iran risks exposing European countries that have since invested in Iran to renewed USA sanctions, after "wind-down" periods of three to six months expire.

Oil companies have been forced to reassess their investment plans in the OPEC producer, however, in the wake of the May 8 move by the USA to pull out of the worldwide nuclear deal with Iran and re-impose sanctions on the country.

The Palestinian Authority's main daily newspaper launched a vitriolic attack on the United States this week, following the opening on Monday of.

However earlier this month, President Donald Trump introduced his withdrawal from the deal, and warned firms that they face sanctions in the event that they do enterprise with Iran.

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 USA authorities over the possibility of a waiver to the project.

The total project, which also involves China 's CNPC and Iranian company Petropars, is estimated to be around $2 billion for the first phase.

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Determined to keep the accord alive, European leaders need to find a way to assure companies that their investments are beyond Washington's extra-territorial reach. Russian Federation has also said it remains committed to the deal.

For the French company to stay, a project waiver would have to protect the company from "any secondary sanction as per U.S. legislation", it said.

A gas flare on an Iranian oil production platform. Joe Kaeser, the CEO of Germany's Siemens, told CNN his company would not be able to do any new business with Tehran.

These might include the loss of financing in dollars by USA banks, the loss of US shareholders and the inability to continue its USA operations, it said.

"It would be suicide to do any new business or funding for Iran or Iran-related companies without explicit guarantees from the USA government. With that in mind it's a logical decision".

In a deal signed in late 2016, Total agreed to operate the South Pars project with a stake of 50.1%.

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