To­tal to sign ma­jor Iran gas deal

Big­gest foreign deal since sanc­tions lifted

Kuwait Times - - BUSINESS -

French en­ergy gi­ant To­tal will fi­nally sign its multi-bil­lion-dol­lar agree­ment to de­velop an Ira­nian offshore gas field to­day, the oil min­istry said, in the big­gest foreign deal since sanc­tions were eased last year. “The in­ter­na­tional agree­ment for the de­vel­op­ment of phase 11 of South Pars will be signed to­day in the pres­ence of the oil min­istry and man­agers of To­tal, the Chi­nese com­pany CNPC and Ira­nian com­pany Petropars,” a min­istry spokesman told AFP.

To­tal signed a pre­lim­i­nary deal with Iran in Novem­ber, tak­ing a 50.1 per­cent stake in the $4.8 bil­lion (4.2 bil­lion euro) project. China Na­tional Pe­tro­leum Cor­po­ra­tion (CNPC) will own 30 per­cent and Petropars 19.9 per­cent. To­tal will put in an ini­tial $1 bil­lion for the first stage of the 20-year project. The gas pro­duced will “feed into the do­mes­tic Ira­nian mar­ket start­ing from 2021,” a To­tal spokesman told AFP in Paris.

He said the com­pany would “im­ple­ment the project with the strictest re­spect for na­tional and in­ter­na­tional law”. The con­tract was ini­tially due to be signed in early 2017, but CEO Patrick Pouyanne said in Fe­bru­ary that To­tal would wait to see whether the US ad­min­is­tra­tion of Pres­i­dent Don­ald Trump re-im­posed sanc­tions on Iran. Trump threat­ened dur­ing his cam­paign to tear up the land­mark ac­cord be­tween Iran and six world pow­ers that came into force in Jan­uary 2016 and eased sanc­tions in ex­change for curbs to Tehran’s nu­clear pro­gram.

His ad­min­is­tra­tion has taken a tough line on Iran and im­posed fresh sanc­tions re­lated to its bal­lis­tic mis­sile pro­gram and mil­i­tary ac­tiv­i­ties in the re­gion. But the White House has kept the nu­clear deal alive, con­tin­u­ing to waive the rel­e­vant sanc­tions ev­ery few months as re­quired un­der the agree­ment. It is part­way through a 90-day re­view on whether to up­hold the deal, al­though any move to aban­don it would be strongly op­posed by the other sig­na­to­ries-Bri­tain, France, Germany, China and Rus­sia.

Re­turn to Iran

To­day’s sign­ing will mark To­tal’s re­turn to Iran, which has the sec­ond-largest gas re­serves and fourth-largest oil re­serves in the world. The French firm led de­vel­op­ment of phases two and three of South Pars in the 1990s and had signed up to de­velop phase 11 back in 2009.

But it was forced to aban­don its projects in Iran in 2012 when France joined Euro­pean Union part­ners in im­pos­ing sanc­tions, in­clud­ing an oil em­bargo, over the coun­try’s nu­clear pro­gram. Iran’s oil of­fi­cials have been keen to at­tract Western in­vest­ment and know-how to im­prove the coun­try’s out­dated en­ergy in­fra­struc­ture. Iran has also signed pre­lim­i­nary agree­ments with Shell and Rus­sia’s Gazprom to de­velop oil and gas projects.

Such deals have not been with­out con­tro­versy in Iran, which has bit­ter mem­o­ries of ex­ploita­tion and in­ter­ven­tions driven by foreign oil in­ter­ests. Con­ser­va­tives crit­i­cized the move to award ten­ders to foreign firms last year. That forced the oil min­istry to con­firm that do­mes­tic con­glom­er­ates, in­clud­ing one con­trolled by the elite Revo­lu­tion­ary Guards, would be al­lowed to com­pete. The first stage of the new 20-year project at South Pars will cost around $2 bil­lion and con­sist of 30 wells and two well­head plat­forms con­nected to ex­ist­ing on­shore treatment fa­cil­i­ties. The site will even­tu­ally pump 50.9 mil­lion cu­bic me­ters (1.8 bil­lion cu­bic feet) of gas per day into Iran’s na­tional grid. —AFP

This file photo taken on March 12, 2017 shows an Ira­nian la­borer walk­ing the plat­form of the oil fa­cil­ity in the Khark Is­land, on the shore of the Gulf. — AFP

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