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Total's pullout not affecting South Pars development: Official

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
The whole reserves of the South Pars gas field, which Iran shares with Qatar, are worth around $2.9 trillion at current market prices.

A senior official says Iran’s development of the South Pars field has not halted despite French oil and energy company Total’s plan to withdraw from the project.

China’s CNPC will take over as the operator if Total quits and in case both companies leave the project, Iran’s PetroPars will undertake the development work, deputy head of the National Iranian Oil Company (NIOC) Golamreza Manouchehri said Tuesday.

“The claim that the development of phase two of the South Pars field has been stopped because of Total is not true and everything is going according to plan,” he said.

Total holds the leading 50.1 percent stake in the project, alongside CNPC with 30 percent, and NIOC subsidiary PetroPars with 19.9 percent.

CNPC has said it is ready to take over Total’s stake in the project after the French company said it might have to withdraw because of the US decision to reimpose sanctions on the Islamic Republic.

The state-owned Chinese energy major has already spent about $20 million on planning to develop the field, according to Reuters.

The project will have a production capacity of 2 billion cubic feet per day, or 400,000 barrels of oil equivalent per day including condensate.

Having clinched the $5 billion deal in July 2017, Total had dragged its feet on the final investment decision until US President Donald Trump’s announcement in May prompted the company to call it quits.

Total has said it will certainly ditch the project unless it gets sanctions waivers from the US government, which is unlikely to grant.

Other European companies have also been winding down their business in Iran despite verbal pledges by their governments to shield them from US penalties.

Manouchehri said talks with Maersk Oil to develop South Pars oil layer have stopped because the Danish company is now owned by Total. Negotiations, however, are ongoing with other domestic and foreign companies to boost oil recovery from the field which is currently producing 20,000 barrels per day (bpd).

This file photo by Shana shows deputy head of the National Iranian Oil Company Golamreza Manouchehri talking to reporters in Tehran. 

In the absence of the Europeans, Iran will rely mainly on Chinese and Russian companies to push ahead with its development plans.

Manouchehri said NIOC is currently in talks with Russia’s Gazprom over the development of the Azar and Changuleh oilfields.

Indians are also “seriously pursuing” the Farzad B gas project in the Persian Gulf, he said.

The two sides have been trying to narrow differences since the field’s discovery by an Indian consortium in 2008.

Tehran has reportedly reduced the scope of the project and asked New Delhi to submit a revised proposal which is said to be worth $3-4 billion.

Manouchehri said Iran has defined 30 development packages worth $6 billion which will boost production from its oilfields by 400,000 bpd.

“Based on these projects, which are executed in the form of EPCF (engineering, procurement, construction and financing) contracts, reimbursement of costs will come from the increase in production.”

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