According to Iranian state TV, Total, the French oil giant, has officially pulled out of Iran following the threats of the United States to impose sanctions on firms who are doing business in the country.
Bijan Zanganeh, the oil minister of the country, said that the process to look for a company to replace Total – that was set to develop phase 11 of the South Pars gas field project – was already underway.
In July 2017, Total signed a deal that was worth $4.8bn to develop a field off the southern coast of Iran as the lead partner alongside Iran’s Petropars and the China National Petroleum Corporation (CNPC).
Zanganeh informed ICANA, the official news website of the Iranian parliament, that the firm had originally announced its plan to turn its back from the said project two months ago.
Earlier, some officials in Iran had suggested that the state-owned CNPC of China could take over the stake of Total in the South Pars gas project. IT would lift its interest to more than 80 percent from the current 30 percent.
The United States reimposed the sanctions on Iran after Washington turned its back from the 2015 nuclear agreement between the world powers and Tehran. The said agreement had imposed limits on the nuclear ambitions of Iran in exchange for sanctions relief.
Last May, Total said that it would have to unwind all of its operations on the SP11 project by this coming November unless it was granted a specific project waiver by the authorities of the United States – protecting the firm from any secondary sanction.
The oil company made it clear that it could not commit further to the said project, however, it said that it had so far spent less than €40 million on the scheme.
Total said that the withdrawal from Iran would not affect its target on production growth of five percent compound annual growth rate between the period of 2016 and 2022.