20 Jun Total will go ahead with initial $1b investment in Iran, CEO
Total will go ahead with the development of a large gas field in Iran, the first major Western energy investment since the country signed an international nuclear deal.
Patrick Pouyanne, Total CEO said the French energy giant would make an initial US$1 billion investment, the biggest since the United States lifted certain sanctions under the 2015 agreement.
However, the commitment carries a certain risk as Washington has warned it could cancel the sanction relief if it suspects Tehran is not curbing its nuclear programme in line with the agreement.
“It is worth taking the risk at $1 billion because it opens a huge market. We are perfectly conscious of some risks. We have taken into account (sanctions) snap-backs, we have to take into account regulation changes,” Pouyanne said in an interview.
Total, which was one of the biggest investors in Iran until nuclear sanctions were imposed in 2006, will return to develop phase 11 of the South Pars offshore project in the Gulf, which will cost up to $5 billion.
Although the French firm is one of the world’s major oil and gas players, the other international giants such as Royal Dutch Shell and BP have been reluctant to commit investment to Iran due uncertainty on contracts and a sharp drop in oil prices.