France’s Total has officially left Iran: oil minister
France’s Total has officially left Iran: oil minister
- Total said it would be impossible to remain in Iran unless it received a specific waiver from Washington, which was not granted
- Total would have been highly vulnerable to US penalties for remaining in Iran
“Total has officially left the agreement for the development of phase 11 of South Pars (gas field). It has been more than two months that it announced that it would leave the contract,” he told parliament’s news agency ICANA.
Zanganeh also appeared before parliament to underline the dire state of Iran’s oil and gas facilities, which he said were “worn out” and in need of renovation that Iran could not afford.
The United States said in May that it was abandoning the 2015 nuclear deal and reimposing sanctions on Iran in two phases in August and November.
The second phase will target Iran’s oil industry.
The other parties to the nuclear deal — Britain, France, Germany, China and Russia — have vowed to stay in the accord but their companies risk huge penalties if they keep doing business in Iran.
Total had already said it would be impossible to remain in Iran unless it received a specific waiver from Washington, which was not granted.
Total signed up in July 2017 for the $4.8 billion project to develop the field off Iran’s southern coast, as the lead partner alongside the China National Petroleum Corporation (CNPC) and Iran’s Petropars.
It was due to make an initial $1 billion investment, but the company said in May that it had spent less than €40 million on the project to date, as uncertainty over US actions mounted.
Total would have been highly vulnerable to US penalties for remaining in Iran.
The company has $10 billion of capital employed in its US assets, and US banks are involved in 90 percent of its financing operations, Total said in May.
It remains unclear whether CNPC will take over Total’s stake in the project.
Iran remains wary of relying on Chinese firms after bad experiences in the past. A previous contract for CNPC to develop the field at South Pars was suspended in 2011 after it failed to make progress.
The urgent need for investment to upgrade Iran’s dilapidated energy infrastructure was a key motivator behind its decision to join the 2015 nuclear deal.
Zanganeh appeared in parliament on Monday to answer questions on safety concerns following a number of recent fires at refineries.
“A big part of the oil industry has been worn out and the necessary renovation has not taken place,” he told parliament, according to the official IRNA news agency.
He said there were 10 cases per day of tubes perforating in Iran’s southern facilities, and that some refineries were as much as 80 years old, “whereas the useful life of an industrial unit is 30 years.”
“We have no resources for renovating them,” he added.
‘Get prices down’ Trump tells OPEC
- Trump highlights US security role in region
- Comments come ahead of oil producers meeting in Algeria
LONDON: US president Donald Trump urged OPEC to lower crude prices on Thursday while reminding Mideast oil exporters of US security support.
He made his remarks on Twitter ahead of a keenly awaited meeting of OPEC countries and its allies in Algiers this weekend as pressure mounts on them to prevent a spike in prices caused by the reimposition of oil sanctions on Iran.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices!” he tweeted.
“We will remember. The OPEC monopoly must get prices down now!”
Despite the threat, the group and its allies are unlikely to agree to an official increase in output, Reuters reported on Thursday, citing OPEC sources.
In June they agreed to increase production by about one million barrels per day (bpd). That decision was was spurred by a recovery in oil prices, in part caused by OPEC and its partners agreeing to lower production since 2017.
Known as OPEC+, the group of oil producers which includes Russia are due to meet on Sunday in Algiers to look at how to allocate the additional one million bpd within its quote a framework.
OPEC sources told Reuters that there was no immediate plan for any official action as such a move would require OPEC to hold what it calls an extraordinary meeting, which is not on the table.
Oil prices slipped after Trumps remarks, with Brent crude shedding 40 cents to $79 a barrel in early afternoon trade in London while US light crude was unchanged at about $71.12.
Brent had been trading at around $80 on expectations that global supplies would come under pressure from the introduction of US sanctions on Iranian crude exports on Nov. 4.
Some countries has already started to halt imports from Tehran ahead of that deadline, leading analysts to speculate about how much spare capacity there is in the Middle East to compensate for the loss of Iranian exports as well as how much of that spare capacity can be easily brought online after years of under-investment in the industry.
Analysts expect oil to trend higher and through the $80 barrier as the deadline for US sanctions approaches.
“Brent is definitely fighting the $80 line, wanting to break above,” said SEB Markets chief commodities analyst Bjarne Schieldrop, Reuters reported. “But this is likely going to break very soon.”