Iranian Oil Minister Bijan Zanganeh says if French energy giant Total decides to exit the Iran South Pars 11 (SP11) gas field development, a Chinese company is ready to replace it.
“Total has said that if it doesn’t get an exemption from the United States to continue its work, it will begin to pull out of the deal. If that happens, the Chinese firm CNPC will replace Total.” Zanganeh was quoted as saying by oil ministry’s Shana news service.
In a press release on Wednesday, Total said it may pull out of SP11 project in light of the US recent withdraw from the Iran nuclear deal.
China’s state-owned CNPC is set to take over a leading role held by Total in a huge gas project in Iran in case the French energy giant decides to quit amid US sanctions against the Islamic Republic.
“On 8 May 2018, President Donald Trump announced the United States’ decision to withdraw from the JCPOA (nuclear agreement) and to reinstate US sanctions that were in force before the JCPOA’s implementation, subject to certain wind down periods,” Total said in the press release.
It went on to say that it has to unwind all related projects by 4 November 2018 unless it is granted a specific waive by the US.
Total added it is engaging with French and US authorities to examine the possibility of a project waiver.
It underlined that the waiver should include protection of the company from any secondary sanction as per US legislation.
The French company, together with the other partner Petrochina, began to launch SP11 project on 4 July 2017 in compliance with UN resolutions and US, EU and French legislation applicable at the time.
Total’s expenditure for the SP11 contract has been less than Eur40mn ($47 million) so far and the company says withdrawal would not impact its production growth target of 5% CAGR between 2016 and 2022.
SP11 is a gas development project aimed at supplying domestic gas to the domestic Iranian market.