Total officially leaves Iran

Total officially leaves Iran

Iran’s oil minister Bijan Zanganeh said that France’s Total has officially left Iran after the United States threatened to impose sanctions on companies that do business in the country, reported.

"The process to replace (Total) with another company is underway," Iranian state TV cited Zanganeh as saying.

The minister added that Total was no longer working on its contract to develop phase 11 of the South Pars gas project.

The Oil Ministry’s website SHANA also cited Zanganeh as saying that Total had announced its plans to leave more than two months ago.

Iranian officials had earlier suggested China’s state-owned CNPC could take over Total’s stake in the South Pars gas project, lifting its interest to more than 80 percent from 30 percent now.

The United States reimposed sanctions on Iran after Washington withdrew from the 2015 nuclear agreement between Tehran and world powers. The agreement had imposed limits on Iran’s nuclear ambitions in exchange for sanctions relief.

Total’s CEO Patrick Pouyanne said in May 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.”

Head of the Center for Central Asia and Caucasus Studies at the Russian Academy of Sciences, Stanislav Pritchin, speaking with Vestnik Kavkaza, noted that Total's withdrawal is an unpleasant precedent for Iran in the U.S. sanctions war. "This is quite a serious step, dictated primarily by fear of being sanctioned by the U.S. Despite the fact that Europe has not withdrawn from the JCPOA, European companies are afraid to work with Iran now," he explained.

"Iran needs both Western investments and technologies, which means that the departure of large companies will deal a tangible blow to the Iranian economy. The worst this is the fact that after this case others will suspend their preliminary plans to enter the Iranian markets. Iran has always found an opportunity to sell its oil under sanctions, but it will be coupled with financial losses and, as a consequence, Iran's return to the same state as it was before 2015," Stanislav Pritchin said.

The leading expert of the North-South Political Science Center, Alexander Karavaev, in turn, noted that Total's withdrawal will affect not only the oil sector, but the entire economy of Iran. "Through insurance business it will affect, for example, transport and transportation. And now another question arises: will any other company take Irans' place," he said.

"On the one hand, the place might be interesting, relatively speaking, for CNPC or Rosneft - but we cannot talk about automation here. Nobody was ready for the fact that today, on August 20, Total will publish a memorandum. Companies, which  want to replace the French company will put forward their conditions at the upcoming talks. Of course, the replacement may not be fast, approximately, it may take from 2-3 quarters to 1.5 years. Much may change in the upcoming years.," Alexander Karavaev said.