Iran to sign landmark gas deal with French, Chinese companies
- Author: Joey Payne Jul 04, 2017,
Jul 04, 2017, 0:43
French energy giant Total and the National Iranian Oil Company (NIOC) have signed a contract for the development and production of phase 11 of South Pars (SP11), the world's largest gas field, Total said in a press release on July 3.
Total signed a preliminary deal with Iran in November, taking a 50.1 per cent stake in the $4.8 billion project, the report said.
Total will invest in phase 11 of the South Pars project alongside China National Petroleum Corporation, which will have 30% of the project, and Iran's Petropars 19.9%.
Zanganeh also held out a hand to US oil companies, saying his country needs some $200 billion of investments in its oil industry in the next five years to make up for time lost during sanctions.
Iran holds the world's largest gas reserves, estimated by BP Plc at 1,183 trillion cubic feet (33 trillion cubic meters), and is the third-biggest oil producer in the Organization of Petroleum Exporting Countries.
Total shares were marked 2% higher in the opening 90 minutes of Paris trading to change hands at €44.15 each, trimming their three-month decline to around 9.4%.
Hossein Amiri Khamkani, a member of an Iranian parliamentary committee on energy, said he believed Monday's deal "breaks the taboo of American sanctions and opens the way for other companies".
The contract has a 20-year duration, extendable by another five years.
Shell signed a preliminary agreement to explore opportunities in Iranian oil fields late a year ago.
The project will be developed in two phases, with about 30 wells and $2 billion slated for the first development effort. It is now entering Phase 11 of development.
Wood Mackenzie senior research analyst Homayoun Falakshahi said this was a significant event for Iran's oil and gas industry.
While Mr. Pouyanné can not rule out new sanctions, he and other potential investors were pleased when the Trump administration reapproved waivers, originally signed by the Obama administration, exempting worldwide companies that invest in Iran from certain United States sanctions. The signing of the final document was postponed to allow for inspections to ensure compliance with US sanctions against Iran. Iran, meanwhile, has missed out on that windfall, as worldwide sanctions over its nuclear ambitions have cut it off from the necessary technology.
"The company has expressed willingness (about investment in Iran) and negotiations continue in this regard", he added. Total was the first Western company to load an Iranian oil cargo in February 2016 after sanctions lifted.