Iran signs $4.8 bil­lion gas deal with France’s To­tal

First phase to cost $2 bil­lion

Kuwait Times - - FRONT PAGE -

France’s To­tal has signed a deal with Iran to fur­ther de­velop its part of the world’s largest gas field, be­com­ing the first west­ern en­ergy com­pany to sign a ma­jor deal with Tehran since the lift­ing of in­ter­na­tional sanc­tions ear­lier this year.

To­tal con­firmed yes­ter­day it had signed a heads of agree­ment with Na­tional Ira­nian Oil Com­pany (NIOC) for the Phase 11 devel­op­ment of South Pars in the Gulf, which ex­tends into Qatari wa­ters where it is known as the North field. The SP11 project will progress in two stages, the first cost­ing an es­ti­mated $2 bil­lion, To­tal said. The pro­duced gas will be fed into Iran’s gas net­work. The French com­pany has al­ready played a key role in Iran’s en­ergy in­dus­try, in­clud­ing the devel­op­ment of phases 2 and 3 of South Pars in the 2000s, be­fore pulling out of the coun­try af­ter in­ter­na­tional sanc­tions were im­posed in 2010.

For­eign com­pa­nies keen to tap into Iran’s vast oil and gas re­serves have so far made lit­tle in­roads into the coun­try de­spite the lift­ing of many sanc­tions ear­lier this year fol­low­ing a land­mark agree­ment on Iran’s nu­clear pro­gram.

Tehran has pledged to open up its oil in­dus­try but for­eign com­pa­nies, in­clud­ing BP and Italy’s Eni re­cently said they still have lit­tle in­for­ma­tion about Ira­nian oil fields and con­tract terms, hin­der­ing in­vest­ment de­ci­sions. Chief Ex­ec­u­tive Of­fi­cer Pa­trick Pouyanne, who has taken some ma­jor in­vest­ment de­ci­sions in re­cent years de­spite one of the sec­tor’s long­est down­turns, said the agree­ment “re­sulted in an at­trac­tive com­mer­cial frame­work.”

To­tal said it would op­er­ate the SP11 project and have a 50.1 per­cent stake in it. Petropars, a sub­sidiary of the Na­tional Ira­nian Oil Com­pany, will have a 19.9 per­cent stake while state-China Na­tional Petroleum Corp (CNPC) will have a 30 per­cent stake. The devel­op­ment will have a pro­duc­tion ca­pac­ity of 1.8 bil­lion cu­bic feet per day, or 370,000 bar­rels of oil equiv­a­lent, with out­put to be fed into Iran’s gas net­work. “This project fits with the group’s strat­egy of ex­pand­ing its pres­ence in the Mid­dle East, where the ori­gins of the group lie, and grow­ing its gas port­fo­lio by adding low unit cost, long plateau gas as­sets,” Pouyanne said in a state­ment.

To­tal will de­velop the project in com­pli­ance with na­tional and in­ter­na­tional laws and the in­vest­ment will be un­der­taken with­out bank fi­nance, he told re­porters.

—AFP

TEHRAN: Seated (L-R) Ali Kar­dor, Man­ag­ing Di­rec­tor of the Na­tional Ira­nian Oil Com­pany (NIOC), Stephane Michel, To­tal’s head of Mid­dle East ex­plo­ration and pro­duc­tion, Hamid Ak­bari, Man­ag­ing Di­rec­tor of Petropars Group and Jean Ping Zhou, China Na­tional Petroleum Cor­po­ra­tion (CNPC), sign an off­shore gas field agree­ment in Tehran yes­ter­day.

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