Total has two months to seek US sanctions exemption, Iran oil minister says

Total said on May 16 that it would pull out of South Pars if it did not receive a waiver from the United States. (Reuters)

• Iran's oil minister gives Total 60 days to win a sanctions waiver from Washington or it would lose its stake in a multi-billion-dollar gas project
• Total was the only western firm to finalise an investment deal in Iran's energy sector following the 2015 nuclear deal

LONDON: French oil major Total has two months to seek exemption from US sanctions after Washington’s withdrawal from the international nuclear deal, Iran’s oil minister told state news agency SHANA on Wednesday.
The minister, Bijan Zanganeh, added that failure to secure an exemption would mean that China’s state-owned CNPC could take over Total’s stake in the South Pars gas project, lifting its own interest from 30 percent to more than 80 percent.
The United States this month said it would impose new sanctions against oil and gas producer Iran after abandoning the 2015 agreement that limited Tehran’s nuclear ambitions in exchange for sanctions relief.
“Total has 60 days to negotiate with the US government,” Zanganeh said, adding that the French government could also lobby Washington.
Total signed a contract in 2017 to develop phase 11 of the South Pars field with an initial investment of $1 billion — a contract Tehran repeatedly hailed as a symbol of the nuclear deal’s success.
A spokesman for Total told Reuters: “On May 16, we said that in accordance with our contractual commitments vis a vis the Iranian authorities, Total was engaging with the French and US authorities to examine the possibility of a project waiver.”
“It is the process and timing that was agreed upon in the SP 11 contract in case there would be sanctions. We activated the process planned in the contract,” he added.
He did not give any further details.
Total’s CEO Patrick Pouyanne said last week that the only way for the company to continue their project in Iran would be to have a special waiver, but added that “it’s quite unlikely.”
European powers still see the nuclear accord as the best chance of stopping Tehran from acquiring a nuclear weapon and have intensified efforts to save the pact.
Zanganeh also said on state television that an agreement with Europe would inspire other potential buyers of Iranian oil.
“Europe is buying only one third of Iranian oil, but an agreement with Europe is important to guarantee our sales, and find insurance for the ships ferrying the crude. Other buyers would also be inspired by this,” he said.
Lukoil Russia’s second-biggest oil producer, said on Tuesday that it had decided not to go ahead with plans to develop projects in Iran because of the threat of US sanctions.
Iran’s crude oil exports declined slightly in May, according to estimates from a leading tanker-tracking company, in the first sign that the threat of US sanctions may be deterring buyers.