Iran to sign new gas deal with Total

IRAN plans to sign a new contract to develop its giant South Pars gas field with France’s Total and China’s CNPC today, the first major Western energy investment since sanctions against Tehran were lifted, an Iranian oil ministry official said yesterday.

A spokesman for Total confirmed the company will sign the contract to produce gas for the Iranian market from 2021, adding that the 20-year deal will be the first Iranian Petroleum Contract (IPC) signed in Iran.

Total holds a 50.1 percent interest in the South Pars project, with state-owned China National Petroleum Corporation owning 30 percent and Iran’s Petropars 19.9 percent.

The offshore field was first developed in the 1990s and Total was one of the biggest investors in Iran, until the international sanctions were imposed in 2006 over suspicions that Tehran was trying to develop nuclear arms.

Ceremony

Total has decided to return and develop Phase 11 of the South Pars project, which will cost up to $5 billion (R65.4bn).

“The international contract for development of Phase 11 of South Pars in the framework of IPC (Iranian Petroleum Contract) will be signed on Monday at 2.30pm, at a ceremony in Tehran attended by Iranian oil minister Bijan Zanganeh and senior officials from France’s Total, China’s CNPCI and Iran’s Petropars,” the Iranian oil ministry official said.

Total’s boss Patrick Pouyanne has said that the group would make an initial $1bn investment after the US extended sanctions relief under the 2015 agreement.

Iran, the third largest producer in Opec, hopes it will attract more foreign companies.