Daily Management Review

French Oil Giant Total Formally Pulls Out Of Iran Due to US Sanctions: Reports


French Oil Giant Total Formally Pulls Out Of Iran Due to US Sanctions: Reports
According to a report televised on Iranian state television and quoting the oil minister of the country, a project for the development of a giant natural gas field in the country has bene abandoned by the French oil giant Total as the European company officially left Iran. This has resulted in the search for an alter5native by the country which is facing economic sanctions form the United States.
"Total Iran has officially left the contract to develop the South Pars Gas project's phase 11... the process to replace with another company is underway," Bijan Namdar Zanganeh was quoted as saying according to media reports.
Signals of it pulling out of the Islamic republic as well as its forsaking its intention of development of a part of the world's largest gas field at South Pars had been given earlier by Total following by threat of the US of imposing fresh sanctions on Iran after the US President Donald Trump pulled out of the Iran nuclear deal struck in 2015.
The automotive sector of Iran was targeted by the first wave of sanctions imposed in early August. Other areas targeted include the issuance of debt and metals trade. However, the Trump administration has warned that more sanctions would be imposed on the country in November targeting the critical oil sector of Iran along with its shipping industry and financial institutions.
And companies outside of the US who had any form of business links with Iran were also advised by the Trump administration to shut down all business relations with the country or they could be slapped with secondary sanctions for doing business in the country. This resulted in a number of companies moving out of Iran. While companies such as Maersk, Peugeot, GE, Boeing and Siemens have all severed business relations with Tehran, Russian oil giant Lukoil has also announced that it would put on hold its plans for creation of joint ventures in the country.
For Iran, which is one of the largest contributors of OPEC, the abandonment of Total form the agreement to develop the South Pars gas project is a strong blow. In May the French company had announced that after conducting a detailed assessment of the impact of the sanctions on Iran by the US, it would drake a final call on its relationship with Iran in case the Trump administration did not grant the company any waiver from the secondary sanctions.
US sanctions meant that “there’s not a single international company like Total who can work in any country with secondary sanctions. I don't have the right. It's just the reality of the world", said Total CEO Patrick Pouyanne in a television interview in June this year.
There has bene no comments from Total on the news.