Total signs contract to develop Iran’s share of biggest gas field

IRAN signed a formal contract with Total to develop its share of the world’s biggest natural gas field – the first investment in the country by an international energy company since sanctions were eased last year.

The 20-year deal with National Iranian Oil Co and China National Petroleum Corp to develop phase 11 of the South Pars offshore gas field represents the “first of many” projects for Total in Iran, chief executive Patrick Pouyanne said on Monday in Tehran.

Total will be operator of the project, with the first phase estimated to cost about $2 billion (R26.2bn).

Iran’s oil minister, Bijan Namdar Zanganeh, put the overall value of the contract at about $5bn.

The agreement is “a big deal” for Iran and “will open the door for more companies to sign contracts”, said Robin Mills, the head of Dubai-based consultant Qamar Energy.

It “also gains the Iranians some diplomatic cover from both France and China in the event of attempts to impose further sanctions”.

He was referring to antagonism to Iran expressed by some US officials, including President Donald Trump.

South Pars is Iran’s section of the world’s biggest gas deposit, shared with Qatar. The field lies at the centre of a dispute between Qatar and several Arab neighbours.

Saudi Arabia severed commercial links with Qatar last month, accusing it of cozying up to arch-rival Iran.

Qatar initially faced a Monday deadline to comply with 13 demands from a Saudi-led coalition, including a cutback in relations with Iran. It later extended its deadline by two days. – Bloomberg