Latest
Recommended
Published: Wed, November 09, 2016
Economy | By Melissa Porter

France, China to help develop Iranian gas fields

France, China to help develop Iranian gas fields

PARIS-French oil company Total SA said it would avoid US sanctions on Iran by using its own euro-denominated cash to finance the first Western energy deal in the Islamic Republic since global restrictions over its nuclear program were lifted this year.

As part of the deal, the consortium will conduct negotiations to finalise a 20-year contract within the framework of the Iranian petroleum contract, which was recently approved by the Iranian Parliament.

Iran signed a $4.8 billion agreement on development of the country's South Pars gas field's phase 11 on Tuesday with France and China, Shana reported.

"50.1 percent of the investment would come from Total, while China and Iran will take care of the remaining 30 percent and 19.9 percent, respectively", Gholamreza Manouchehri, the deputy head of the NIOC, was quoted as saying by Tasnim news agency.

The SP11 project will be developed in two phases, the first phase, costing around $2bn dollars will consist of 30 wells and two well head platforms connected to existing onshore treatment facilities by two subsea pipelines.

8 signed a $6 billion gas development deal with France's Total.

South Pars 11 (SP11) will have production capacity of 1.8 billion ft³/day.

Iran is also in talks with Danish business conglomerate, Maersk Group, to extract oil from the world's largest South Pars gas field, according to Press TV.

Total declined to comment on the expected agreement with Tehran but, in an interview with the Financial Times, Patrick Pouyanné, chief executive, highlighted Iran among the places he was interested in investing. It marks the first big contract with a Western energy firm since the lifting of most sanctions against Tehran.

Overall OPEC said the cartel itself accounted for much of the world's growing oil production, and its share of the global market will increase as USA output from shale fields slows down.

Unlike American oil majors, Total is not restricted from signing contracts with Iran, where its operations date back to 1990.

French energy company Total confirmed the signing of a preliminary arrangement to work alongside a Chinese company in producing offshore Iranian gas.

Iran is seeking to attract roughly $200 billion in investment into its oil and gas industry.

Like this: