Daily Management Review

French Total and Chinese CNPC come to Iran


11/08/2016


The Iranian government has signed main principles of an agreement with French Total, China National Petroleum Corporation (CNPC) and National Iranian Oil Company (NIOC) on early development of the world's largest South Pars gas field. Total with share of 50.1% will become leading member of the project. Volume of production is expected to reach 51 million cubic meters per day. Total’s investment in the project will amount to about $ 6 billion.



Tostaki1
Tostaki1
French oil and gas company Total has returned to Iran. Thus, it became one of the first major Western companies, which resumed its activities in the Islamic Republic since lifting of sanctions. Today, the French giant announced signing of the basic points of an agreement with the Iranian government on early development of the world's largest South Pars gas field. In addition to Total, the project will be supported by China National Petroleum Corporation and National Iranian Oil Company. The agreement describes development of offshore fields, which will require an investment of $ 6 billion in total. First phase involves investment of $ 2 billion to start preparatory work for installation of two platforms and production from 30 wells.

As expected, production capacity of the project will reach 51 million cubic meters per day. "After successful development of second and third phases in the South Pars in the 2000s, the company is returning to Iran for development of the giant gas field. Total is happy that NIOC’s chose us. This is a recognition of our professional competence as well as a tribute to relationship that our company has built with Iran for many years ", - said Total’s General Director Patrick Pouyanné.

The French oil and gas giant, which will receive 50.1% of the profit, will become the leading member of the project. Other 30% will depart to CNPC, and 19.9% - to Petropars, a subsidiary of NIOC. This agreement gives start to discussion of technical details, which, in turn, are expected to result in signing of a final contract for 20 years. Simultaneously, Total will start to carry out a technological study of the project, and will announce a tender for construction works. This way, works on the field can be immediately commenced once the final agreement is signed.

Europe has left the Iranian market in China's favor, yet now the Europeans are rushing to keep up in the race for Iran. In particular, British companies set up a joint investment fund. Lifting of sanctions stipulates provision of information about the market and business in Iran with regard to foreign companies. Charlman investment group, registered capital of $ 2.5 billion, for example, decided not to wait for lifting of sanctions, and entered the Iranian market even before implementation of the nuclear agreement. The company intended to establish investment funds in the Iranian stock market. Another British company Turkwaz has invested $ 7 million in Iran.

British and other European companies are looking for oil and gas investment, banking and commercial sectors. Western companies are still under pressure to prevent their participation in the Iranian economy. In the current circumstances, trade with Iran is raising many questions, and is requiring high awareness about the country. 

source: cnn.com






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