Tehran says China’s state-owned energy giant CNPC has replaced Total in the multibillion-dollar South Pars gas project after the French company left Iran due to the return of US sanctions.
Iran’s Petroleum Minister Bijan Zangeneh told the ICANA news agency on Sunday that CNPC will begin operations in the project, without providing further details.
“China’s CNPC company has officially replaced Total in phase 11 of South Pars, but it has not started work practically,” he said. “Talks should be held with CNPC to determine when it will start its operational and executive activity.”
In 2017, Total signed a contract to develop phase 11 of the South Pars natural gas field with an initial investment of $1 billion.
It was the first major Western energy investment in Iran after sanctions were lifted under the 2015 nuclear agreement signed between Tehran and six world countries, including the US.
However, Total — which had a 50.1 percent stake in South Pars — pulled out of the project in August after it failed to obtain a waiver from US, which pulled out of the nuclear deal in May and re-imposed the unilateral anti-Iran sanctions it had lifted under the international document.
Petroleum Minister Bijan Zanganeh says the French energy giant has officially left the country, ending speculations over whether it would stay to finish a gas project following the return of US sanctions.
“As for the future of Total’s share, we have not been informed of an official CNPC position, but as we have always said, CNPC, a Chinese state-owned company, has the right to resume our participation if it decides so,” Total said after announcing its withdrawal from South Pars project.
CNPC already holds a 30 percent stake in South Pars, while National Iranian Oil Company subsidiary PetroPars holds the remaining 19.9 percent.
Under the administration of US President Donald Trump, Washington has taken an increasingly hostile approach toward Tehran in what is viewed by Iranian officials as an economic war.
After withdrawal from the nuclear deal, the US has vowed “toughest ever” sanctions against Iran. It has also warned of severe penalties for the companies that evade the bans and engage in business with Iran.
The Trump administration had further vowed to reduce Tehran’s oil revenue to zero, but it went back on its pledge and gave waivers to almost all major customers of the country.
The European signatories to the Iran deal have vowed all-out efforts to save the accord and protect their firms in the face of American bans. They are now working on a payment mechanism system meant to circumvent the bans and facilitate trade with Iran.