04 July, 2017
On Monday, Total SA, based in France, said it has agreed to a deal win Iran to invest $1 billion in a giant gas field in the Islamic Republic, which marks the first big investment in many years by a company from the West in Iran's oil sector.
The first major Western energy investment since sanctions against Tehran were lifted will cost up to $5 billion (3.85 billion pounds), with production expected to start within 40 months, an oil ministry source said.
Total expects the 20-year South Pars Phase 11 project to produce gas from 2021.
Iran΄s oil ministry confirmed at the weekend the signing of a multi-billion-dollar agreement with French energy giant Total and Chinese company CNPC after a multi-year delay.
Royal Dutch Shell and Italy's Eni have provisional agreements with Tehran to help develop other parts of Iran's oil and gas industry.
Iran sits atop the world's fourth-largest oil reserves and the second-biggest stores of natural gas. Iran shares the field with Qatar, which refers to the prime real estate as the North Dome. It is now entering Phase 11 of development. Offshore facilities, including a platform for field compression, opens South Pars up for additional development and, at 20,000 tons, will be the largest platform of its kind ever installed in the Persian Gulf.
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Total said the project will have a capacity of two billion cubic feet of natural gas a day, or 400,000 barrels of oil equivalent per day, including condensate.
"The main obstacle is being created by the U.S. government".
Since signing the heads of agreement last November, Total has been conducting engineering studies on behalf of the consortium and initiated calls for tender in order to award the contracts required to develop the project by the end of the year. The news was also reported by Iran's state-run Tasnim News Agency, which said the deal was "in the final stages".
While Mr. Pouyanné can not rule out new sanctions, he and other potential investors were pleased when the Trump administration reapproved waivers, originally signed by the Obama administration, exempting global companies that invest in Iran from certain United States sanctions.
Hopes are high in Iran that the Iranian Petroleum Contract will enhance local companies' capabilities.
The U.S. Congress has been pushing for a new set of sanctions against Iran and its hard-line Revolutionary Guard, a paramilitary unit responsible for recent ballistic missile tests that angered Washington.