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US Sanctions: French Giant Total Quits Lucrative Iran Gas Project

Deal valuing $4.8bn signed in July 2017

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LAHORE MIRROR (Monitoring Desk)– French energy giant Total has confirmed it is withdrawing from a multi billion-dollar gas project in Iran after it failed to obtain a waiver from US sanctions recently imposed on Iran by Trump Administration.

Total signed a deal worth $4.8bn in July 2017 to develop a field off Iran’s southern coast as the lead partner alongside the China National Petroleum Corporation (CNPC) and Iran’s Petropars.

“Total has notified the Iranian authorities of its withdrawal from the contract following the 60-day deadline for obtaining a potential waiver from the US authorities,” the company told AFP news agency on Monday.

“Despite the backing of the French and European authorities, such a waiver could not have been obtained.”

Iranian Oil Minister Bijan Namdar Zanganeh said the company had notified authorities of its decision to exit the deal.

“Total has officially left the agreement for the development of phase 11 of South Pars,” Zanganeh said, emphasising the dire state of Iran’s oil-and-gas facilities, which he said were “worn out” and in need of renovation that Iran could not afford.

The deal was meant to bring in state-of-the-art technology to tap the gas field, which Iran could then replicate on surrounding ones.

The US said in May it was discontinuing the 2015 nuclear deal with Iran and other nations, and reimposing sanctions on Tehran in two phases in August and November, with the second targeting the country’s vital oil-and-gas sector.

Total has $10bn of capital in US assets, and US banks are involved in 90 percent of its financing operations, meaning it would have been highly vulnerable to US penalties for remaining in Iran.

SOURCE: NEWS AGENCIES