The Strategist

Chinese CNPC replaces Total in Iranian South Pars gas project

11/26/2018 - 13:37

CNPC, the Chinese state-owned oil and gas company, has replaced Total, the French energy giant, in the South Pars Iranian multi-billion gas project. This was stated by Iranian Oil Minister Bijan Zangeneh, the ICANA news agency reported.

Laurent Vincenti
Laurent Vincenti
"The Chinese CNPC officially replaced Total in development of Phase 11 South Pars, but in fact it has not yet begun work. It is necessary to negotiate with CNPC ... about when it will begin work," Zangane told the agency, without specifying details.

Total decided to develop part of the world's largest natural gas field South Pars, after the nuclear deal with Iran in 2015 allowed the lifting of sanctions on Tehran.

However, on May 8, US President Donald Trump said that the country was withdrawing from an international nuclear deal with Iran and was restoring sanctions against Tehran.

Washington left European companies doing business in Iran 90 to 180 days to curtail investment, saying that otherwise firms would be at risk of secondary US sanctions.

"There is not a single international company like Total that could work in any country with secondary sanctions. I do not have the right to do that. This is just the reality of the world," Patrick Pouyanné told CNBC at OPEC workshop in Vienna.

In August, Total ceased operations in Iran.

Total acted as a lead participant in a gas field development consortium. The share of the French company in the South Pars project was 50.1%. Chinese CNPC already owns 30%. Petropars, a subsidiary of the National Iranian Oil Company (NIOC), owns the remaining 19.9%.