Iran: China’s CNPC Could Replace Total in South Pars Project

Iran: China’s CNPC Could Replace Total in South Pars Project

TEHRAN (Tasnim) – Iranian Oil Minister Bijan Namdar Zanganeh said the China National Petroleum Company (CNPC) will replace Total if the French company backs out of a deal on development of Iran's South Pars gas field.

Should France’s Total pull out of the project on development of South Pars gas field’s phase 11, China’s CNPC will replace it, Zanganeh told reporters on Wednesday.

In that case, the Chinese company will own Total’s stakes in the project, the minister added, noting that the Iranian national oil company’s subsidiary PetroPars will also remain as a stakeholder.

He explained that the French company will not be fined for pulling out of the contract, but added that Total’s expenditure on the contract will not be paid back until completion of the project.

In July 2017, Total signed the $1 billion deal to develop the South Pars gas field in southwest Iran.

According to the agreement, CNPC could take over Total’s 50.1 percent stake and become operator of the project if Total withdraws from Iran.

CNPC has now a 30 percent stake, while PetroPars holds the remaining 19.9 percent.

Total faces losses of several tens of millions of dollars if it pulls out of the project.

The French energy company announced on Wednesday that it may pull out of South Pars deal in light of a decision by US President Donald Trump to pull his country out of the 2015 Iran nuclear deal.

Total said it would not be making any further commitments towards the Iranian South Pars project for now, and added it was engaged with French and US authorities over the possibility of a waiver to the project.

The French company said it had so far spent less than 40 million euros ($47 million) on the South Pars project, and that pulling out of it would not impact the company’s general production growth targets.

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