Iran official says gas field contract with Total, CNPC unchanged

Total signed a contract in 2017 to develop Phase 11 of South Pars field with an initial investment of $1 billion. (Atta Kenare/AFP)
Updated 12 August 2018
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Iran official says gas field contract with Total, CNPC unchanged

  • The French company had said it would pull out unless it secured a US sanctions waiver
  • Total has not said what it would do with its 50.1 percent stake should it pull out

DUBAI: A gas field development contract with France’s Total, and China’s state-owned CNPC remains unchanged, a senior Iranian oil official said according to the oil ministry news agency SHANA on Saturday — hours after state new agency IRNA quoted him as saying CNPC had taken Total’s share in the project.
“The role of the members of the consortium developing this project is in accordance with the provisions of the contract, and there is still no formal change in these provisions,” Mohammad Mostafavi, director of investment at Iran’s state oil firm NIOC, was quoted as saying.
IRNA earlier quoted Mostafavi as saying CNPC had taken over Total’s share in Iran’s multi-billion dollar South Pars gas project. There was no explanation for the apparent discrepancy.
Total signed a contract in 2017 to develop Phase 11 of South Pars field with an initial investment of $1 billion, marking the first major Western energy investment in the country after sanctions were lifted in 2016. South Pars has the world’s biggest natural gas reserves ever found in one place.
But the French company had said it would pull out unless it secured a US sanctions waiver, and Gholamreza Manouchehri, deputy head of NIOC, said in June that if Total were to walk away, then CNPC would take over.
A spokeswoman for Total declined to comment.
Total has not said what it would do with its 50.1 percent stake should it pull out, and it has until Nov. 4 to wind down its Iran operations.
The renewed US sanctions were among those lifted under a 2015 deal between world powers and Tehran on curbing Iran’s nuclear program. US President Donald Trump abandoned the deal in May. Washington is planning to impose heavier sanctions in November aimed at Iran’s oil sector.
There was no immediate comment on the IRNA report by CNPC, which held a 30 percent stake in the project. The remainder is held by Iran’s Petropars.


Stronger US dollar unlikely to derail bullish view on commodities — Goldman Sachs

Updated 32 min 35 sec ago
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Stronger US dollar unlikely to derail bullish view on commodities — Goldman Sachs

  • The dollar has been lifted by a stronger-than-expected US economy, the world’s largest
  • A stronger greenback makes the purchase of dollar-denominated international commodities more expensive for holders of other currencies

BENGALURU: Goldman Sachs said a stronger dollar is unlikely to derail its bullish view on commodities, which are likely to find support from physical shortages.
The dollar has been lifted by a stronger-than-expected US economy, the world’s largest, and that’s a positive sign for global growth, the US investment bank said.
The US dollar index has lost more than 1 percent this week, but this follows months of strong demand over US-China trade-related tensions, as investors bet the greenback would gain at the expense of riskier currencies.
“The risk aversion this summer created significant emerging market destocking, particularly in China, as consumers attempted to avoid a strong dollar and tariffs by liquidating inventories,” Goldman said in a note dated on Thursday.
A stronger greenback makes the purchase of dollar-denominated international commodities more expensive for holders of other currencies, making buyers and users more likely to draw on any stored materials in preference to imports.
“This liquidation, however, has a physical limit with Chinese destocking having already created significant increases in physical (premiums) for oil and metals – a sign of physical shortages.”
Going forward, oil had a strong fundamental outlook helped by US demand growth, supply losses and disruptions, and still constrained US shale output, Goldman said.
The bank said its near-term Brent crude oil price target remained at $80 a barrel.
The bank said it was moderating its bullish view for gold due to a sell-off in emerging markets, and it lowered its 12-month price forecast for the metal to $1,325 per ounce, down from $1,450 an ounce earlier.