Iran's Oil Minister Bijan Zangeneh said that France's Total has 60 days to secure a waiver from U.S. sanctions against Iran to remain as a participant in the South Pars 11 gas development project, Shana reported Wednesday.
Total announced on May 16 that it would "not be in a position to continue" the project in Iran and would "have to unwind all related operations before Nov. 4, 2018 unless Total is granted a specific project waiver by the U.S. authorities with the support of the French and European authorities".
The company said the decision was taken as a consequence of U.S. President Donald Trump's May 8 announcement of the U.S. withdrawal from the nuclear deal between Iran and world powers known as the JCPOA, and the re-imposition of sanctions against Tehran.
Zangeneh said Total was currently negotiating with the U.S. government to stay in the project.
"Total has 60 days to negotiate with the U.S. government. In the course of these 60 days, the French government may also initiate talks with the U.S. government aimed at ensuring Total's stay in Iran," the minister added.
Zangeneh affirmed that Total would remain in the project if the U.S. government endorsed the sanctions waiver. Otherwise, he said, China National Petroleum Company (CNPC) would replace the French company.
The minister had said after Total's announcement that in case the CNPC decided to withdraw too, the other party of the contract, Iran's Petropars, would replace it as the major developer of the project confirming, "the project will certainly not be halted".
Zangeneh added there was no discussion of fining, but the amount Total had invested in the project so far would not be repaid to it "for now".
The French oil giant confirmed two weeks ago that its actual spending to date with respect to the South Pars 11 contract -- which was signed in 2017 to develop phase 11 of the field with an initial investment of $1 billion-- was less than €40 million ($47.2 million) in group share, and a withdrawal would not impact its production growth target of 5 percent compound annual growth rate between 2016 and 2022.
The Iranian minister further said the oil ministry and the Iranian parliament's energy committee agreed at a meeting on Tuesday to overcome the current difficult conditions the country was faced with.
During the meeting, the secretary of the ministry briefed commission representatives on how to sell Iranian oil and secure new buyers after the U.S. withdrawal, Shana said.
By Hale Turkes