Total is the first company to sign such an important agreement with Iran in more than ten years. The estimated investment is US$ 4.8 billion. The US hostile position slows down the normalisation of Iran’s economic relations, but Europe looks forward to future agreements. For Zarif, Iran remains committed to the nuclear deal “despite reckless US hostility".
Tehran (AsiaNews/Agencies) – French energy giant Total was set to defy US pressure on Monday, with a multi-billion-dollar gas deal with Iran, the first by a European firm in more than a decade.
It is by far the biggest vote of confidence in the Islamic republic since sanctions were lifted under a 2015 nuclear deal with world powers.
Total is to invest an initial US$ 1 billion in the South Pars offshore gas field as part of a consortium with Chinese and Iranian firms.
Total's CEO Patrick Pouyanne and Iranian Oil Minister Bijan Namadar Zanganeh signed the 20-year deal, which will eventually see the consortium pour US$ 4.8 billion into the South Pars phase 11 project.
Total will take a 50.1 per cent stake in the South Pars phase 11 project, whilst China National Petroleum Corporation (CNPC) will own 30 per cent and Iran's Petropars 19.9 per cent.
The aim is to start pumping into Iran's domestic grid in 2021, eventually reaching 50.9 million cubic metres of gas per day.
European firms have been eyeing opportunities in Iran, which has the world's second-largest gas reserves and fourth-largest oil reserves, but they have been cautious about investing due to US hostility.
Many companies and financial institutions are reluctant to engage with Tehran for fear of repercussions from Washington. For example, Shell and Russia's Gazprom have signed only preliminary deals to date.
In view of this, Total has appointed a compliance officer with the sole task of ensuring it does not fall foul of US measures against Iran.
Last month, the US Senate passed a bill imposing new sanctions on Iran for its support for acts of international terrorism.
The law has yet to go to the House of Representatives, and it is unclear whether President Donald Trump will abandon the nuclear agreement with Iran.
Any attempt to scupper the latter will likely face major push-back from its other signatories: Great Britain, France, Germany, China and Russia.
Last month, Iranian Foreign Minister Javad Zarif met with European Union leaders, and tweeted that they were committed to the nuclear deal "despite reckless US hostility".
Total has a history of involvement in the Middle Eastern nation, having led development of phases two and three of South Pars in the 1990s.
Total had signed up to develop Phase 11 back in 2009 but was forced to abandon its projects in 2012 when France joined a US-led campaign to impose sanctions, including an oil embargo, against the country.