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RFL/RE – French energy giant Total will sign a multibillion-dollar agreement to develop an Iranian offshore gas field on July 3, Iran’s Oil Ministry said, in the biggest foreign deal since sanctions were eased last year.
“The international agreement for the development of Phase 11 of South Pars will be signed on Monday in the presence of the oil ministry and managers of Total, the Chinese company CNPC, and Iranian company Petropars,” a ministry spokesman said.
Total signed a preliminary deal with Iran in November, acquiring a 50.1 percent stake in the $4.8 billion project.
China National Petroleum Corporation (CNPC) will own 30 percent and Petropars 19.9 percent.
The offshore field was first developed in the 1990s, when Total was one of the largest investors in Iran, until international sanctions were imposed over suspicions that Tehran was trying to develop nuclear arms.
Total effectively left Iran in 2012 when France joined European Union partners in imposing sanctions, including an oil embargo.
Total will now put in an initial $1 billion for the first stage of the 20-year project.
The deal was initially due to be signed early this year, but Total said in February that it would wait to see whether the U.S. administration of President Donald Trump reimposed sanctions on Iran.
Trump threatened during his campaign to cancel the landmark accord between Iran and six world powers that came into force in January last year and eased sanctions in exchange for curbs to Tehran’s nuclear program.
The new U.S. administration has taken a tough line on Iran and imposed new sanctions related to its ballistic-missile program and military actions in the region.
But the White House has kept the nuclear agreement alive, continuing to waive the relevant sanctions every few months as required under the agreement.
