Total looks to US permit to start Iran plans

France’s energy giant Total is soliciting permission from US authorities to implement a slew of projects worth several billion dollars in Iran. 

The biggest of all is Iran’s plan to develop phase 11 of the giant South Pars gas field with $4 billion of investment, in which Total seeks a 50% stake.

The company inked a preliminary agreement with Iran last year, but it is looking to Washington for authorization to finalize it.

International firms have been cautious in their dealings with Iran despite the lifting of sanctions early last year because of fears of being blacklisted by the US.

Total became the first Western oil major to sign an energy agreement with Iran after the European Union and the United States undertook to lift sanctions on the Islamic Republic under a nuclear deal signed in July 2015.

The company helped Iran develop phases 2 and 3 of South Pars in the 2000s, before pulling out of the country after Western sanctions were imposed in 2011.

Total resumed trading with Iran in February 2016, and bought about 50 million barrels of crude for about $1.9 billion last year, on top of 11 million barrels of petroleum products worth $394 million, the company said on Friday.

The company says it is interested in more Iranian projects other than South Pars, including an LNG plant which is half complete as well as a multi-billion-dollar oil and gas pipeline between Iran and Oman.

International companies are benefiting from a US ban on American firms to deal with Iran but they mostly prefer to secure Washington’s go-ahead first for any business in the Middle Eastern country.     

In a regulatory filing to the US Securities and Exchange Commission on Friday, Total outlined its plans, including for operation of South Pars’ phase 11 with a 50.1% stake.

China's CNPC is about to own 30% through one of its subsidiaries and Iran's Petropars would have 19.9%. They are expected to operate the project with a production capacity of 370,000 barrels of oil equivalent per day.

The project would involve building two offshore platforms and 30 wells. Iran has said contracts would be finalized around April but Total CEO Patrick Pouyanne expects a final investment decision to come by summer provided that the US renews sanctions waivers. 

In its filing, Total said it had also discussed investment in a 10 million tonne-per-year LNG plant in Tombak on the Persian Gulf coast and more in the South Azadegan oil field.

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