China’s CNPC reportedly might take Total’s stake in Iranian South Pars investment if French pull out

By bne IntelliNews December 17, 2017

Top Chinese oil and gas company CNPC is considering taking over the 50.1% stake held by French energy major Total in a multi-billion dollar deal to develop part of the giant South Pars gas field if the latter departs Iran to adhere to any new US sanctions, industry sources told Reuters on December 15.

In July, in what was seen as a breakthrough for Iran in attracting foreign investment since the dropping of crippling sanctions with the start of the nuclear deal 19 months previoulsy, Total agreed to put in an initial $1bn to develop South Pars Phase 11. The contract gave CNPC the option to take over Total’s stake if it pulled out, sources involved in the talks reportedly told the news service.

In signing the deal, Total became the first Western energy major to commit to an investment in the post-nuclear sanctions Islamic Republic. After the signing, it also held out the prospect of committing to big petrochemical projects in the country.

But with US President Donald Trump possibly set in January to introduce moves that could wreck the nuclear deal, Total has become anxious that its assets stateside could in the near future become exposed to sanctions should it continue with its investment in Iran.

CNPC has a 30% stake in the phase 11 project, while the Iranian national oil company’s subsidiary PetroPars holds the remaining 19.9%.

Related Articles

US targets Iranian banks, companies and paramilitary force with fresh set of sanctions

The US Treasury is targeting Iran’s Bank Mellat and Mehr Eqtesad Bank with additional sanctions aimed at wrecking the Iranian economy. The Treasury, spearheading the Trump ... more

Feeling the squeeze: sanctions-hit Iran suffers lack of tomato paste

The Iranian government has banned tomato exports after instances of panic buying of tomato paste amid the economic turmoil caused by reimposed heavy US sanctions. The severe devaluation of the ... more

Iranian rial continues its comeback as central bank intervenes on market

The Iranian rial (IRR) continued its rebound on October 7, strengthening to around IRR123,000 against the US dollar on the free market, according to data on foreign exchange website ... more