Iran says China group ready to replace Total on gas deal

Updated 17 May 2018
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Iran says China group ready to replace Total on gas deal

  • Total started the $4.8 billion South Pars 11 project in July 2017, two years after Western powers signed a nuclear deal with Tehran.
  • Chinese state-owned oil company CNPC will replace Total on a major gas field project in Iran if the French energy giant pulls out over renewed US sanctions against Tehran.

TEHRAN: Chinese state-owned oil company CNPC will replace Total on a major gas field project in Iran if the French energy giant pulls out over renewed US sanctions against Tehran, Iran’s oil minister has said.
“Total has said that if it doesn’t get an exemption from the United States to continue its work, it will begin to pull out of the deal,” Bijan Namdar Zanganeh was quoted as saying by his ministry’s Shana news service.
“If that happens, the Chinese firm CNPC will replace Total.”
Total started the $4.8 billion South Pars 11 project in July 2017, two years after Western powers signed a nuclear deal with Tehran prompting the return of many businesses to Iran.
But earlier this month, US President Donald Trump announced his withdrawal from the deal, and warned companies that they face sanctions if they do business with Iran.
The French group said Wednesday 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 on the Iranian project, which it runs with its partner Petrochina and which is dedicated to the supply of domestic gas inside Iran.
Zanganeh said on Wednesday that were CNPC, which was part of the Total deal, unable to carry out the work in South Pars due to US sanctions it would fall to Iran’s Petropars.
Iran possesses the second-largest gas reserves on the planet, after Russia, and the fourth largest oil supplies.


Oil dips as market eyes possible easing of OPEC supply curbs

Updated 37 min 25 sec ago
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Oil dips as market eyes possible easing of OPEC supply curbs

SINGAPORE: Oil prices edged lower on Wednesday with the possibility of higher OPEC output weighing on the market, although geopolitical risks are expected to keep prices near multi-year highs.
Brent futures fell 43 cents, or 0.5 percent, to $79.14 a barrel by 0218 GMT, after climbing 35 cents on Tuesday. Last week, the global benchmark hit $80.50 a barrel, the highest since November 2014.
US West Texas Intermediate (WTI) crude futures eased 25 cents, or 0.4 percent, to $71.95 a barrel, having climbed on Tuesday to $72.83 a barrel, the highest since November 2014.
“Looks like the market is pausing at current levels,” said Michael McCarthy, Chief Market Strategist at brokerage CMC Markets.
“If sanctions are introduced against Iran, most of the OPEC producers would like to be pumping more oil, particularly giving the higher prices.”
The Organization of the Petroleum Exporting Countries (OPEC) may decide to raise oil output as soon as June due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC and oil industry sources familiar with the discussions told Reuters.
The OPEC-led supply curbs have largely cleared an inventory surplus in industrialized countries based on the deal’s original goals, and stocks continue to decline.
“...Investors are mindful of upcoming talks between Russia and Saudi Arabia about whether they should look at a controlled relaxation of over-compliance with their output cut agreement,” ANZ said in a note.
Rising supply in the US, where shale production is forecast to hit a record high in June, has limited the upward move in prices.
Concerns about a potential drop in Iranian oil exports following Washington’s exit from a nuclear arms control deal with Tehran have driven prices to multi-year highs.
On Monday, the US demanded Iran make sweeping changes — from dropping its nuclear program to pulling out of the Syrian civil war — or face severe economic sanctions.
Iran dismissed Washington’s ultimatum and one senior Iranian official said it showed the US is seeking “regime change” in Iran.
In addition, Venezuela’s crude output could drop further following a disputed presidential election.
The US is actively considering oil sanctions on Venezuela, where output has dropped by a third in two years to its lowest in decades.
US crude and distillate stockpiles fell last week, while gasoline inventories increased unexpectedly, data from industry group the American Petroleum Institute showed on Tuesday.