French energy giant — Total – has signed a multi-billion-dollar agreement to develop an Iranian offshore gas field. This is Iran’s biggest foreign deal since sanctions were eased last year, said oil ministry.
The international agreement for developing Phase II of South Pars was signed in the presence of Iran’s Oil Ministry, managers of Total, Chinese company CNPC and Iranian company Petropars, a ministry spokesman told a news agency. Total had signed preliminary deal with Iran in November 2016, taking a 50.1 percent stake in the $4.8 billion (4.2 billion euro) project.
China National Petroleum Corporation (CNPC) will own 30% and Petropars 19.9%. Total will put in $1 billion for first stage of the 20-year project. Gas produced will feed domestic Iranian market starting from 2021, a Total spokesman told AFP in Paris. The company would ‘implement the project with strictest respect for national and international law’.
Deal’s signing marks Total’s return to Iran, which has the second-largest gas reserves and fourth-largest oil reserves in the world. The French firm led development of phases two and three of South Pars in 1990s and had signed up to develop phase II in 2009. But it was forced to abandon Iranian projects in 2012 when France joined European Union in imposing sanctions, including an oil embargo, over Iran’s nuclear program. Iran’s oil officials are keen to attract Western investment and know-how to improve the country’s outdated energy infrastructure.
Iran has also signed agreements with Shell and Russia’s Gazprom to develop oil and gas projects. Such deals created controversy in Iran, which has bitter memories of exploitation and interventions driven by foreign oil interests.
First stage of the 20-year project at South Pars, will cost around $2 billion and consist of 30 wells and two well head platforms connected to existing onshore treatment facilities. The site will pump 50.9 million cubic metres (1.8 billion cubic feet) of gas daily into Iran’s national grid.
