Total signs major Iran gas deal, defying US pressure

(FILES) This file photo taken on May 06, 2015 shows people walking past the stand of French oil and gas company Total during Iran's annual International Oil, Gas, Refining & Petrochemical Exhibition in Tehran. French energy giant Total is to sign a $4.8 billion deal to develop an Iranian offshore gas field, the oil ministry said on July 2, 2017, in the biggest foreign deal since sanctions were eased. (AFP)
Updated 03 July 2017

Total signs major Iran gas deal, defying US pressure

TEHRAN: French energy giant Total was set to defy US pressure on Monday, signing a multi-billion-dollar gas deal with Iran, the first by a European firm in more than a decade.
Total is to invest an initial $1 billion (880 million euros) in the South Pars offshore gas field as part of a consortium with Chinese and Iranian firms.
It is by far the biggest vote of confidence in the Islamic republic since sanctions were lifted under a 2015 nuclear deal with world powers.
Total’s CEO Patrick Pouyanne and Iranian Oil Minister Bijan Namadar Zanganeh are set to sign the 20-year deal, which will eventually see the consortium pour $4.8 billion into the project.
Pouyanne will later meet President Hassan Rouhani.
European firms have been hungrily eyeing opportunities in Iran, which has the world’s second-largest gas reserves and fourth-largest oil reserves.
But they have been cautious about investing due to continuing US sanctions.
Total has appointed a compliance officer with the sole task of ensuring it does not fall foul of US measures against Iran.
In particular, it aims to prevent cash flowing to Iran’s elite Revolutionary Guards — a tall order given their extensive and shadowy presence across much of the Iranian economy.
Just a fortnight ago, the US Senate overwhelmingly passed a bill targeting the Guards over their involvement in regional conflicts and the country’s ballistic missile program.
The White House is in the midst of a 90-day review on whether to abandon the nuclear deal entirely, which President Donald Trump threatened to do during his election campaign.
The uncertainty has been enough to deter global firms such as BP from dipping their toes in Iranian waters, while Shell and Russia’s Gazprom have signed only preliminary deals to date.
Even without the threat of sanctions, investing in the Iranian economy is not for the faint-hearted.
Foreign firms in Iran still face “pervasive corruption... high levels of red tape; potential for currency instability (and) reluctance to allow foreign involvement within the domestic economy,” consultancy firm BMI Research wrote in a briefing note Monday.
For all that, Iran’s large population of middle-class consumers presents an irresistable opportunity for many businesses in Europe and beyond.
Any attempt to scupper the nuclear deal will likely face major push-back from its other signatories: Britain, France, Germany, China and Russia.
Foreign Minister Mohammad Javad Zarif was warmly received by EU leaders last month and tweeted that they were committed to the nuclear deal “despite reckless US hostility.”
Total has a history of involvement in Iran, having led development of phases two and three of South Pars in the 1990s.
It will take a 50.1 percent stake in the South Pars phase 11 project, while China National Petroleum Corporation (CNPC) will own 30 percent and Iran’s Petropars 19.9 percent.
The aim is to start pumping into Iran’s domestic grid in 2021, eventually reaching 50.9 million cubic meters (1.8 billion cubic feet) of gas per day.
The firm had signed up to develop phase 11 back in 2009 but was forced to abandon its projects in Iran in 2012 when France joined European Union partners in imposing sanctions, including an oil embargo.


UK to purge Huawei from 5G by 2027, angering China and pleasing Trump

Updated 14 July 2020

UK to purge Huawei from 5G by 2027, angering China and pleasing Trump

  • UK to purge Huawei from 5G by 2027
  • No new 5G components to be bought from end of 2020

LONDON: Prime Minister Boris Johnson ordered Huawei equipment to be purged completely from Britain’s 5G network by 2027, risking the ire of China by signalling that the world’s biggest telecoms equipment maker is no longer welcome in the West.
The seven-year lag will please British telecoms operators such as BT, Vodafone and Three, which had feared they would be forced to spend billions of pounds to rip out Huawei equipment much faster. But it will delay the roll out of 5G.
The United States had long pushed Johnson to reverse a decision he made in January to grant Huawei a limited role in 5G. London has also been dismayed by a crackdown in Hong Kong and the perception China did not tell the whole truth over the coronavirus.
Britain’s National Security Council (NSC), chaired by Johnson, decided on Tuesday to ban the purchase 5G components from the end of this year and to order the removal of all existing Huawei gear from the 5G network by 2027.
The cyber arm of Britain’s GCHQ eavesdropping agency, the National Cyber Security Center, told ministers it could no longer guarantee the stable supply of Huawei gear after the United States imposed new sanctions on chip technology.
Telecoms companies will also be told to stop using Huawei in fixed-line fiber broadband within the next two years.
“This has not been an easy decision, but it is the right one for the UK telecoms networks, for our national security and our economy, both now and indeed in the long run,” Britain’s Digital, Culture, Media and Sport Secretary Oliver Dowden told parliament.
“By the time of the next election, we will have implemented in law, an irreversible path for the complete removal of Huawei equipment from our 5G networks.”
In what some have compared to the Cold War antagonism with the Soviet Union, the United States is worried that 5G dominance is a milestone toward Chinese technological supremacy that could define the geopolitics of the 21st century.
With faster data and increased capacity, 5G will become the nervous system of the future economy — carrying data on everything from global financial flows to critical infrastructure such as energy, defense and transport.
After Australia first recognized the destructive power of 5G if hijacked by a hostile state, the West has become steadily more worried about Huawei.
White House national security adviser Robert O’Brien is meeting representatives of France, the UK, Germany and Italy in Paris this week to discuss security, including 5G.
The West is trying to create a group of rivals to Huawei to build 5G networks. Other large-scale telecoms equipment suppliers are Sweden’s Ericsson and Finland’s Nokia .

End of ‘Golden Era’?
Hanging up on Huawei, founded by a former People’s Liberation Army engineer, marks the end of what former Prime Minister David Cameron cast as a “golden era” in ties, promoting Britain as Europe’s top destination for Chinese capital. Cameron toasted the relationship over a beer with President Xi Jinping in an English pub, which was later bought by a Chinese firm.
Trump, though, has repeatedly asked London to ban Huawei which Washington calls an agent of the Chinese Communist state — an argument that has support in Johnson’s Conservative Party.
Huawei denies it spies for China and has said the United States wants to frustrate its growth because no US company could offer the same range of technology at a competitive price.
China says banning one of its flagship global technology companies would have far-reaching ramifications.
In January, Johnson defied Trump by allowing what he called high-risk companies’ involvement in 5G, capped at 35%.