France’s energy giant Total has warned that it might have to abandon a flagship $4.8 billion gas project in Iran because of US sanctions.
Total and the Islamic Republic signed the agreement in July to develop one of the phases of the South Pars gasfield, the largest in the world. The Rouhani Government has seen the deal as a breakthrough in its efforts for Iranian economic recovery, with implementation the July 2015 nuclear accord with the 5+1 Powers (US, UK, France, Germany, Russia, China).
But at the end of October, Total’s Chief Executive Officer Patrick Pouyanne cautioned that the company was wary of new US sanctions, under consideration by Congress after an October 13 statement by Donald Trump decertifying Iranian compliance with the nuclear agreement: ” I see what’s happening in the US and we have to look at the fact that we are governed by laws and no one knows what Congress will decide.”
Pouyanne repeated in a Monday interview with CNN that Total would have to move carefully because of its assets in the US, which could be seized if Washington expands sanctions and the gas deal proceeds:
Either we can do the deal legally if there is a legal framework. If we cannot do that for legal reasons, because of change of regime of sanctions, then we have to revisit it….
If there is a sanctions regime, we have to look at it carefully. We work in the US, we have assets in the US, we just acquired more assets in the US.
Last week Total purchased a portfolio of liquified natural gas assets which included a stake in the Cameron liquified natural gas project in Louisiana, one of the first new gas export terminals in North America.
Pouyanne said that Total can award contracts for the South Pars development by January if there is no change in the US sanctions regime.
Almost all foreign investment in Iran’s oil and gas fields was halted after the disputed 2009 Presidential election, the subsequent mass protests, and the dispute over Tehran’s nuclear program.
Iranian Oil Minister Bijan Zanganeh says $200 billion in investment is needed for the development of Iran’s oil and gas fields.