Total wins race to sign first energy deal with Iran since end of sanctions

France’s Total this week became the first western energy company to sign a major deal with Tehran since the lifting of international sanctions earlier this year by confirming that it had signed a heads of agreement with  the National Iranian Oil Company (NIOC) for the Phase 11 development of South Pars in the Gulf. Known as SP11, the project will be developed in two stages with the first expected to cost an estimated $2bn.
While Tehran has made all the right noises about wishing to open up its oil industry to foreign investors, several multinationals including BP and Eni have recently complained that insufficient data has been made available for them to make informed investment decisions. For its part, Total already has a track record in Iran and helped develop  phases 2 and 3 of South Pars in the 2000s, before pulling out of the country after international sanctions were imposed in 2010.
The French company said that it would both operate and have a 50.1% stake in the project which will have an eventual daily production capacity off 1.8 bn ft ³ or 370,000 barrels of oil equivalent, with output to be fed into Iran’s gas network. China’s CNPC and  the NIOC subsidiary  Petropars  will take 30% and 19.9% stakes respectively. “This project fits in with the group’s strategy of expanding its presence in the Middle East, where the origins of the group lie, and growing its gas portfolio by adding low unit cost, long plateau gas assets,” said Total CEO Patrick Pouyanne.

Source: reuters