Iran gets gas deal with French firm, Chi­nese state

$5-bil­lion off-shore agree­ment sign that sanc­tions be­ing lifted

The Hamilton Spectator - - BUSINESS - NASSER KARIMI TEHRAN, IRAN —

Iran on Mon­day signed a $5 bil­lion agree­ment with France’s To­tal SA and a Chi­nese oil com­pany to de­velop its mas­sive off­shore nat­u­ral gas field, the first such deal with for­eign com­pa­nies since the land­mark 2015 nu­clear deal with world pow­ers.

Of­fi­cials in Tehran signed the agree­ment, which will see the firms de­velop a por­tion of the mas­sive South Pars off­shore field that Iran shares with Qatar.

To­tal has a 50.1-per cent share in the deal. The state-owned China Na­tional Petroleum Corp. has 30per cent stake and Iran’s Petropars has 19.9 per cent.

The devel­op­ment at phase 11 of the South Pars field will see 20 wells and two well­head plat­forms built and con­nected to ex­ist­ing fa­cil­i­ties by two un­der­wa­ter pipe­lines, To­tal said. A sec­ond phase will in­volve the con­struc­tion of off­shore com­pres­sion fa­cil­i­ties, the firm said.

To­tal said the project will have a ca­pac­ity of two bil­lion cu­bic feet of nat­u­ral gas a day or 400,000 bar­rels of oil equiv­a­lent per day, in­clud­ing con­den­sate.

“This is a ma­jor agree­ment for To­tal, which of­fi­cially marks our re­turn to Iran to open a new page in the his­tory of our part­ner­ship with the coun­try,” To­tal chair and CEO Pa­trick Pouyanne said. “To­tal will de­velop the project in strict com­pli­ance with ap­pli­ca­ble na­tional and in­ter­na­tional laws.”

Ira­nian Oil Min­is­ter Bi­jan Zan­ganeh con­grat­u­lated all in­volved, say­ing it will lead to “more than $5 bil­lion in for­eign in­vest­ments.”

He also held out a hand to U.S. oil com­pa­nies, say­ing his coun­try needs some $200 bil­lion of in­vest­ments in its oil in­dus­try in the next five years to make up for time lost dur­ing sanc­tions. Iran hopes to pro­duce six mil­lion bar­rels of crude oil and con­den­sates a day in five years, he said, up from some 3.6 mil­lion to­day.

“We do not consider any ob­sta­cle for the par­tic­i­pa­tion of Amer­i­can com­pa­nies,” Zan­ganeh said. “The main ob­sta­cle is be­ing cre­ated by the U.S. gov­ern­ment.”

Iran sits atop the world’s fourth­largest oil re­serves and the sec­ond­biggest stores of nat­u­ral gas. Since the nu­clear deal, which saw Iran lim­it­ing its en­rich­ment of ura­nium in ex­change for eco­nomic sanc­tions be­ing lifted, the coun­try has quickly boosted its crude oil pro­duc­tion and sold what it had in float­ing re­serves. Mon­day’s deal will fur­ther boost its cof­fers and se­cure a new sup­ply of nat­u­ral gas for do­mes­tic con­sump­tion, be­gin­ning in 2021.

The 20-year con­tract also of­fers a vote of con­fi­dence for Iran in the busi­ness world, es­pe­cially as U.S. Pres­i­dent Don­ald Trump has threat­ened to try and rene­go­ti­ate the nu­clear ac­cord.

To­tal pulled out of Iran in 2006 as United Na­tions sanc­tions first took hold over fears Iran’s atomic pro­gram would be used to build nu­clear weapons. Tehran has main­tained its pro­gram is only for peace­ful pur­poses.

In the time since the nu­clear deal, Iran has seen success in other busi­ness ven­tures. Boe­ing Co. and its Euro­pean ri­val Air­bus have signed bil­lions of dol­lars in deals with Iran Air, all al­ready ap­proved by the U.S. Trea­sury.

Chicago-based Boe­ing also signed a $3 bil­lion deal in April to sell 30 737 MAX air­craft to Iran’s Ase­man Air­lines, a firm owned by Iran’s civil ser­vice pension foun­da­tion. The Boe­ing sales rep­re­sent the first ma­jor deals for an Amer­i­can com­pany in Iran since the 1979 Is­lamic Rev­o­lu­tion and U.S. Em­bassy takeover.

THE AS­SO­CI­ATED PRESS

To­tal CEO Pa­trick Pouyanne, left, and Ira­nian Pres­i­dent Has­san Rouhani.

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