Iran: French Firm Out of South Pars Gas Project, China’s Is In

Blanche Robertson
August 12, 2018

Iran's official IRNA news agency is reporting that China's state-owned petroleum corporation has taken a majority share of the country's South Pars gas project after French oil and gas company Total announced it would pull out because renewed USA economic sanctions against Iran.

Total had said it would pull out of the project unless it secured a waiver.

The Saturday report quotes Mohammad Mostafavi, an official in Iran's state oil company, as saying CNPC now owns 80 percent of the shares in the $5 billion project, having bought shares from Total.

Total - with a leading share of 50.1 percent in the development of Phase 11 - had earlier announced it would withdraw from the project once the U.S. restores the sanctions against Iran. Terms of the contract have not yet officially changed, though, according to Shana, the oil ministry's official news site.

Total and CNPC are part of an worldwide consortium that signed a deal with Iran's state oil firm National Iranian Oil Company (NIOC) in 2017 to develop Phase II of the South Pars field, which has the world's biggest natural gas reserves ever found in one place.

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The renewed US sanctions were among those lifted under a 2015 deal between world powers and Tehran on curbing Iran's nuclear program.

Under the deal, Iran agreed to take steps to limit its nuclear program, and to submit to verification by the International Atomic Energy Agency in return for economic sanctions relief. South Pars has the world's biggest natural gas reserves ever found in one place.

Total, had previously withdrawn from South Pars in 2009 because of sanctions.

Total made an initial investment of $1 billion (€875 million) for its 50.1 percent stake. At the time, Total said the contract had a 20-year duration. The second wave that would hit in November would ban investments in Iran's oil and gas projects. In 2006 it was awarded a three-year contract to provide offshore well-logging and other services at South Pars.

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