President Donald Trump’s decision to withdraw from the Joint Comprehensive Plan of Action (JCPOA) and to reinstate US sanctions on Iran that were in force before the JCPOA’s implementation, has caused French supermajor to make plans to pull out of its planned development in the Islamic Republic at the South Pars gas field.
In a statement, it said: “As a consequence and as already explained before, 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. This project waiver should include protection of the Company from any secondary sanction as per US legislation.
“Total has always been clear that it cannot afford to be exposed to any secondary sanction, which might include the loss of financing in dollars by US banks for its worldwide operations (US banks are involved in more than 90% of Total’s financing operations), the loss of its US shareholders (US shareholders represent more than 30% of Total’s shareholding) or the inability to continue its US operations (US assets represent more than $10bn dollars of capital employed).
“In these circumstances, Total will not take any further commitment related to the SP11 project and, in accordance with its contractual commitments vis à vis the Iranian authorities, is engaging with the French and US authorities to examine the possibility of a project waiver.”
SP11 is a gas development project dedicated to the supply of gas to the domestic Iranian market. Total claims that its spend on the project, to date, amounts to less than $50mn.