TEHRAN, Young Journalists Club (YJC) - Reuters in an exclusive report said CNPC had already started talks with Iran over a share of 30 percent in the project to develop Phase 11 of Iran’s South Pars gas field – the world’s biggest independent gas field.
The shares of Total – which is the operator of the project – stand at 50.1 percent and rest belong to Iran’s Petropars. The three companies signed an agreement with the National Iranian Oil Company (NIOC) in July to develop Phase 11 at a total price tag of $4.8 billion in what could potential become the largest foreign investment in the Iranian economy after the removal of sanctions against the country last year.
Reuters quoted unnamed Chinese industrial sources as saying that CNPC could take over the stake of the French giant and become the operator of Phase 11.
It added that this would require changes in certain technicalities regarding the project – changes that Reuters said could make CNPC bring in new partners. CNOOC – China’s largest offshore operator – could be one of them.
“In the case of a Total withdrawal, CNPC may need to bring in CNOOC because CNPC has little experience offshore,” Reuters quoted an unnamed Chinese industry official as saying.
A change in ownership structure would mean that CNPC would shoulder 80 percent of the cost of the project, estimated at $2 billion for the first stage, the report added.
Total chief Patrick Pouyanné had previously made it clear he would order to stop Phase 11 investment should Total be forced to pull out of Iran as a result of new sanctions.
This drew a response from Iran’s Petroleum Minister Bijan Zanganeh who said last month the French company could only leave if obliged to under sanctions by the United Nations Security Council – and not the US.
US President Donald Trump in October refused to certify an agreement with Iran that had led to the removal of sanctions against the country and authorized foreign investments in the country – including that led by Total.
The agreement – the Joint Comprehensive Plan of Action (JCPOA) – had been achieved between the permanent members of the Security Council – that include the US – and Iran after spending thousands of hours for negotiations over the Iranian nuclear energy program.
The JCPOA allowed the removal of certain nuclear-related sanctions against Iran in return for the country’s moves to restrict certain aspects of its nuclear energy activities.
Iran has previously announced that the US was falling short of its commitments toward the JCPOA by failing to remove the sanctions against the country and even by moving to impose new sanctions against it.
This is while the International Atomic Energy Agency (IAEA) – which reports Iran’s compliance with the JCPOA – has for multiple times emphasized that the country is fully implementing its commitments toward the nuclear deal.
Trump had given the Congress a deadline of 60 days to determine whether US sanctions against Iran would be re-imposed.
The Congress, however, failed to act when the deadline expired this past Wednesday thus returning the ball over new Iran sanctions to Trump’s court.
Reuters further quoted a Total official as saying that the company faced a financial loss amounting to only several tens of millions of dollars if it pulled out of the project. But that would be a relatively small sum for the $120 billion company, the source added.