Total, along with CNPC and Petropars, would develop part of a giant gas field in South Pars
November 8, 2016: In an agreement that will mark the first Western energy investment since international sanctions were lifted, Iran will sign a preliminary $6 billion deal with France’s Total SA.
Under the deal, Total along with China National Petroleum Corporation (CNPC) and Iran’s state-owned Petropars would develop part of South Pars, a giant gas field in the Persian Gulf. However, details of the deal are not yet available.
The agreement with the French oil giant could act as a catalyst for the return of more Western companies to Iran’s vast energy industry. Till now, European countries have been slow to return to Iran since the country secured an end to sanctions. American sanctions related to terrorism and weapons remain in effect. They forbid US banks from dealing directly with Iran, and prevent all business deals with the Iranian Revolutionary Guard Corps, which is deeply involved in the country’s oil and gas sector.
For long, Total has been one of the most active European companies in Iran. It kept an office open in Iran even when the sanctions were in force. It was the first European oil company to buy Iranian oil and ship it to Europe after restrictions were lifted. Currently, Iran produces about 3.7 million barrels of crude a day and is trying to reach four million barrels or more this year.
The deal with Total will help Iran build its natural-gas production. The South Pars field, which is shared by Iran and Qatar, contains 14,000 billion cubic meters of gas—8% of the world’s known reserves.