Total received an "ultimtum" from the Iranian authorities. Two months to obtain exemption from sanctions by the United States, before being replaced by the Chinese CNPC in the contract for the development of phase 11 of the South Pars natural gas field.
At stake is the extraction of natural gas from the largest point in the world, located off the coast of Iran overlooking the Persian Gulf. This was stated by Bijan Zanganeh, Minister of Oil of Iran. "Total has 60 days to negotiate with the US government“, Explained the minister in a hearing with the parliamentary commission for energy. Last May 20, Zangeneh had specified that the contract for the development of South Pars does not provide for penalties in the event of withdrawal by Total. However, Zangeneh added, the funds invested so far by the French company in the project "will not be repaid" before the completion of the works. Under a $ 4,8 billion deal concluded in July 2017, South Pars' development is entrusted to a consortium consisting of Total for 50,1 percent, CNPC for 30 percent and Petropars for 19,9 percent. Previously, Total announced that unless it obtains waivers from the United States to continue operating in South Pars, it will abandon the project.
The new US sanctions against Iran, adopted following the US withdrawal from the agreement on the Iranian nuclear program (JCPOA) announced on May 8 by President Donald Trump, also affect the presence of international energy companies in the Republic Islamic. The South Pars development contract was the first signed by Iran after the JCPOA entered into force and the removal of international sanctions against the Islamic Republic.