Total France: Unable to Continue Work on South Pars Project Without Exemption from US Sanctions

Total France has stated that it cannot continue work on Phase 11 of the South Pars gas project in Iran without an exemption from US sanctions. Total holds a 50.1% stake in the $5 billion Phase 11 project, while China's CNPC owns 30%, and the remaining shares belong to Iran's Petropars. On Wednesday, May 16, Total announced on its official website that it entered the Phase 11 project based on the laws of France, the US, the European Union, and UN resolutions. Total added that this project was planned to supply domestic gas for Iran, and the company voluntarily informed its contractors of a policy to execute work without the involvement of the Islamic Revolutionary Guard Corps (IRGC) to play a role in the international policy of containing the IRGC. The company's statement emphasized that last week's decision by US President Donald Trump to withdraw from the JCPOA and reinstate sanctions against Iran has posed challenges for Total's presence in the South Pars project, and that Total cannot continue its work in Iran without an exemption from US sanctions. The French company specifically stated that it requires necessary guarantees to avoid falling under US secondary sanctions. Total mentioned that it cannot expose itself to US sanctions as 90% of its transactions involve American banks, and there is a risk that Total could be barred from trading in dollars. The company also expressed concern that US sanctions could lead to the loss of American partners who hold a 30% stake in Total. Additionally, Total has $10 billion worth of projects in the US that may be at risk of sanctions. Total's investment in Phase 11 of the South Pars project has so far been less than €40 million. The company has stated that it will not accept any new commitments regarding Phase 11 and is negotiating with French and American officials about exemptions from sanctions. Bijan Namdar Zangeneh, Iran's Minister of Oil, stated on Wednesday evening that according to the contract, if Total withdraws from the development of Phase 11, CNPC will replace it. He added, 'If the Chinese party also withdraws from the contract, Petropars will remain.' In the event of Total's exit from the project, the amount it has invested so far will be gradually reimbursed by Iran after the project's launch, but no profit will be granted to it.