French oil giant Total seeks exemption from US sanctions for Iran gas project
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French oil major Total said Wednesday it will end work on a major gas field project in Iran unless it is exempt from US sanctions against Tehran that the Trump administration is phasing back in.
But earlier this month, President Donald Trump announced his withdrawal from the deal, and warned companies that they face sanctions if they do business with Iran.
As a consequence, "Total will not be in a position to continue the SP11 project and will have to unwind all related operations before 4 November 2018 unless Total is granted a specific project waiver by the US authorities with the support of the French and European authorities," the French company said in a statement.
US withdrawal from the JCPOA: Total’s position related to the South Pars 11 project in Iran https://t.co/nFbmsn5RFkTotal Press Office (@TotalPress) May 16, 2018
The group said it has $10 billion of capital employed in its US assets, and US banks are involved in 90 percent of its financing operations, making Total highly vulnerable if targeted by any US actions.
By contrast, Total said it had spent less than 40 million euros ($47 million) on the Iranian project, which it runs with its partner Petrochina and which is dedicated to the supply of domestic gas inside Iran.
A withdrawal from the Iran project would not affect Total's current overall production targets as the group had since opened up other growth opportunities, it said.
For the French company to stay, a project waiver would have to protect the company from "any secondary sanction as per US legislation", it said.