Wednesday , 24 October 2018

Confusion Surfaces Over Total’s Investment In Iran Pars Project

RFL/RE – Confusion has surfaced over French energy giant Total’s massive South Pars gas project in Iran after the official IRNA news agency reported that China’s state-owned petroleum corporation had been given a majority stake in the field.

Contradicting that report, the Oil Ministry news agency SHANA later on August 11 quoted the same senior Iranian oil official as saying the gas-field developmental contract remained unchanged.

“The role of the members of the consortium developing this project is in accordance with the provisions of the contract, and there is still no formal change in these provisions,” Mohammad Mostafavi, director of investment at Iran’s state oil firm NIOC, was quoted as saying by SHANA.

The earlier IRNA report said that China’s state-owned CNPC had taken a majority share in the project after Total announced it would pull out because renewed U.S. economic sanctions against Tehran.

The IRNA report also quoted Mostafavi as saying CNPC now owned 80.1 percent of the shares in the $5 billion project, having bought them from Total.

CNPC originally owned about 30 percent of the project.

A spokeswoman for Total declined to comment.

South Pars has the world’s biggest natural-gas reserves ever found at one site.

Total in 2017 signed a contract to develop Phase 11 of the South Pars field, initially investing $1 billion.

It was the first major Western energy investment in the country after sanctions were lifted in 2016, an outcome of the 2015 nuclear deal Tehran signed with six world powers. The deal gave Tehran relief from some financial sanctions in return for curbs on its nuclear program.

However, U.S. President Donald Trump in mid-May pulled out of the nuclear deal, saying the terms were not strict enough and accusing Tehran of violating the spirit of the accord. U.S. sanctions were renewed on August 7.

On May 31, Iran’s oil minister gave Total 60 days to get a sanctions waiver from Washington or said its stake in the project would be given to the Chinese firm.

Total and other major corporations, including carmakers PSA and Renault, subsequently announced they were pulling out of Iran.

Total did not say what it would do with its 50.1 percent stake should it pull out, and it has until November 4 to wind down its Iran operations.

With reporting by Reuters and AP