Total has 60 days to get exemptions from US sanctions in order to proceed with a $2 billion project to develop Iran’s giant South Pars gas field, Minister of Petroleum Bijan Zangeneh has said.
The French oil major has said that it is unable to carry on with the project unless it is granted a specific waiver by US authorities that would protect it against sanctions.
“Total has 60 days to negotiate with the US government. In the course of these 60 days, the French government can negotiate with the US government for Total to stay in Iran,” Zangeneh told the Iranian parliament’s energy commission late Tuesday.
“Otherwise, China National Petroleum Corporation (CNPC) will replace Total in this project,” he added.
Zangeneh attended the parliamentary panel session to brief lawmakers on how his ministry is going to continue Iran’s oil sales and replace customers when US sanctions kick in following Washington’s withdrawal from the nuclear agreement.
The minister said an agreement with Europe would encourage other potential buyers of Iranian oil.
“Europe is buying only one third of Iranian oil, but an agreement with Europe is important to guarantee our sales, and find insurance for the ships ferrying the crude. Other buyers would also be inspired by this,” he said.
Total signed a gas agreement in late 2016 to operate phase 11 of the giant South Pars project, becoming the first major European company to deal with Iran following the lifting of sanctions.
French energy giant Total signed a multi-billion-dollar gas deal with Iran, the first by a European firm in more than a decade.
The French company holds a 50.1% stake in the project, with CNPC owning 30%, and Iran’s Petropars 19.9%.
The project will have a production capacity of 2 billion cubic feet per day, or 400,000 barrels of oil equivalent per day including condensate, starting in 2021.