Total Investing $1 Billion in Gas Field in Iran

Jul 04, 2017, 00:45
Total Investing $1 Billion in Gas Field in Iran

"We are proud and honored to be the first global company to sign an Iranian Petroleum Contract, which offers an attractive commercial framework, following the 2015 worldwide nuclear accord and to therefore contribute to the development of relations between Europe and Iran".

"The worldwide agreement for the development of phase 11 of South Pars will be signed on Monday in the presence of the oil ministry and managers of Total, the Chinese company CNPC and Iranian company Petropars", a ministry spokesman told AFP.

IRNA on Monday quoted Kardor as saying that with oil at $50 a barrel, Iran can make $84 billion from the gas deal with Total by the end of the term of the contract.

Total will be the lead operator in a partnership with China National Petroleum Corp. and Iran's Petropars to develop South Pars, a gas field under the Persian Gulf, one of the world's largest. He also held out a hand to United States oil companies, saying his country needs US$200 billion of investment in its oil industry in the next five years to make up for time lost during sanctions. Iran has the world's third largest gas market, bigger than China, with close to 200 bcm consumed in a year.

Total said the gas from the Pars field will supply the domestic market from 2021. Doha calls the field North Field. Total's shares gained 1.7 percent in Paris trading to 44.02 euros at 2:26 p.m. local time.

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Hossein Amiri Khamkani, a member of an Iranian parliamentary committee on energy, said he believed Monday's deal "breaks the taboo of American sanctions and opens the way for other companies".

As Total wrote on its website, the project will have a production capacity of 2 billion cubic feet (about 56 million cubic meters) per day of gas or 400,000 barrels of oil equivalent per day including condensate.

"We were here 20 years ago".

Zamaninia said it was the first deal signed based on the Iran Petroleum Contract (IPC) framework. "We're very happy", Pouyanne told AFP when the initial deal was signed in November.

According to an official document, prepared by Iran's oil ministry and seen by NGW, the first phase includes construction of two platforms, drilling 30 wells, stretching five pipelines, a fibre cable and a mooring buoy.

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Negotiations between Tehran and oil companies have been further complicated by the election of President Donald Trump in the USA who has been very critical of the agreement reached with Iran over its nuclear program in 2015.

European majors are warming to Iran in the post-sanctions environment.

Trump's administration has taken a tough line on Iran and imposed new US sanctions related to its ballistic-missile program and military actions in the region.

"The company has expressed willingness (about investment in Iran) and negotiations continue in this regard", he added.

This is the first IPC contract signed in Iran.

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