Iran gasfield proves too hot to handle for Total

Protesters stand outside the White House in Washington DC on May 8 as US President Donald Trump announces the United State's withdrawal from the Iran nuclear deal

Protesters stand outside the White House in Washington DC on May 8 as US President Donald Trump announces the United State's withdrawal from the Iran nuclear deal

French oil major Total may turn its back on its $1bn (£740m) Iranian gas project within six months unless it can clinch a sanctions waiver for the project from the U.S. government.

In a statement, Total said it "will have to unwind all related operations" before November 4, unless it's granted a specific waiver by USA authorities that would protect it against sanctions.

Germany, France and the United Kingdom have vowed to stick with the nuclear deal and they're talking to Iranian officials about how to protect the economic benefits it offered Tehran.

In announcing his withdrawal from the deal, Trump warned companies that they face sanctions if they do business with Iran.

Joe Kaeser, the CEO of Germany's Siemens, told CNN his company would not be able to do any new business with Tehran. Russian Federation has also said it remains committed to the deal.

"Total has always been clear that it can not afford to be exposed to any secondary sanction, which might include the loss of financing in dollars by U.S. banks for its worldwide operations", it said in a statement.

"Total has always been clear that it can not afford to be exposed to any secondary sanction, which might include the loss of financing in dollars by United States banks for its worldwide operations", the group added. "They have us by the throat because so much business is conducted and cleared in dollars", one European investment banker said.


"We have a situation where there is a will to impose sanctions on Europeans and a resentment towards European companies who are now being accused of supporting a terrorist state".

"In these circumstances, Total will not take any further commitment related to the SP11 project and, in accordance with its contractual commitments vis-a-vis the Iranian authorities, is engaging with the French and USA authorities to examine the possibility of a project waiver", said the company. "With that in mind it's a logical decision".

It said it had so far spent less than 40 million euros ($47 million) on the project and that pulling out would not impact the company's production growth targets.

The company said on Wednesday that it was unable to proceed with a $2 billion project to develop the country's giant South Pars gas field.

U.S. President Donald Trump, however, denounced the accord, because it did not cover Iran's ballistic missile program, its role in Middle East conflicts or what happens after the deal begins to expire in 2025.

CNPC has a 30% stake in the venture, with Petropars at 19.9%, leaving Total with an operatorship of 50.1%.

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