Chinese oil and gas giant China National Petroleum Corporation (CNPC) is willing to purchase the 50.1% stake held by French energy major Total in the Phase 11 development project covering part of the South Pars gas field off Iran’s Persian Gulf coast, Ria Novosti reported on May 12.

There is a big question mark as to whether Total can continue with the project contract, worth up to several billion dollars, given Donald Trump’s May 8 decision to pull the US out of the Iran nuclear deal and reimpose the heaviest sanctions on Iran. Total, which has substantial assets in the US and would be exposed to any move by Washington to levy sanctions on foreign companies continuing to do business with Iran, has not yet made clear what its approach to South Pars will be from this point onwards—it may be waiting on tangible results from the commitment of France, Germany and the UK to maintain the nuclear deal despite the US exit and seek to protect their companies from any penalties for sticking to trade and investment activities in Iran.

Iranian Foreign Minister Javad Zarif has just completed visits to China and Russia to seek assurances that they will continue to back the nuclear deal despite the US abandonment. He is due in Brussels later on May 14 where he will hope to discover specifics of Europe’s plan to protect European companies continuing to do business with Iran from US sanctions. Meanwhile, at the weekend White House national security advisor John Bolton raised the pressure on Europe, saying US sanctions on European companies that maintain business dealings with Iran were “possible,” while US Secretary of State Mike Pompeo said he remained hopeful Washington and its allies could strike a new nuclear deal with Tehran.

Like EU member states, nuclear accord signatories China and Russia have stated that they are opposed to allowing the US move to destroy the agreement and the former has made it clear it will not be cancelling Iranian oil shipments following the Washington announcement that to the Americans the deal is dead.

With regard to the future of the South Pars deal, an anonymous industry source quoted by Ria Novosti said: “The possibility of Total pulling out is quite high now, and in that scenario CNPC will be ready to fully take over the contract.”

CNPC currently holds a 30% stake in the Phase 11 contract, signed in July last year, while Iran's Petropars has 19.9%. Total committed to spending an initial $1bn on the project and is thought to have spent close to a tenth of that so far. If it drops the contract, it is unlikely to see any of that sum returned, Iranian officials have made clear.

Last mid-November, Total CEO Patrick Pouyanne acknowledged that Total would have to review its investment in South Pars—shared by Iran and Qatar and thought to be the world’s largest gas field—should the US opt to direct fresh major unilateral sanctions at Tehran.

When it was signed, Iranian officials hailed the deal with Total as a post-nuclear sanctions breakthrough in the government campaign to reinvigorate foreign direct investment levels in Iran.

“Either we can do the deal legally if there is a legal framework [but] if we cannot do that for legal reasons, because of [a] change of [the] regime of sanctions, then we have to revisit it,” Pouyanne said.

He added: “We work in the US, we have assets in the US, we just acquired more assets in the US.”