French oil giant Total looks set to return to Iran and its gas fields
Total would be the first European integrated oil company to sign a contract to develop Iranian oil or gas assets after the lifting of sanctions on Tehran earlier this year. The deal would also advance Iran’s goal of tapping its vast oil and natural gas reserves, which are the fourth and second largest in the world, respectively.
Total will lead a consortium that includes China National Petroleum Corp. and Iran’s Petropars to develop the South Pars field in the Persian Gulf, AFP reported, citing the Iranian Oil Ministry. The deal is worth $6 billion and needs to be finalized within six months, a ministry spokesman told AFP.
Total and other European energy giants began pulling out of Iran in 2008 as the international community ratcheted up sanctions on the country over its nuclear program. Total had previously been involved in developing South Pars, which contains nearly 40 percent of Iran’s massive natural gas reserves.
As Europeans exited Iran, China National Petroleum Corp. and other Chinese companies continued their development plans thanks to a loophole that allowed firms investing $20 million or less in the country’s oil and gas sector to keep doing business there. But steadily escalating sanctions eventually made it too onerous for the Chinese drillers to meet the obligations of their contracts with Tehran.
Iran is seeking to attract roughly $200 billion in investment into its oil and gas industry. A key component of that is a new model petroleum contract, which allows foreign companies to participate in more phases of development and production than the old “buy-back” contract.
European oil companies have been eager to re-enter Iran, but continue to mull over the terms of the new contract and watch for signs that major financial institutions will resume operations there.
that didnt take long eh?
“Iran is seeking to attract roughly $200 billion in investment into its oil and gas industry.”