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Total in Talks to Resume Operations

Total in Talks to Resume OperationsTotal in Talks to Resume Operations

French oil and gas major Total S.A. is willing to resume operations in Iran and is in ongoing negotiations with officials in Tehran, as the prospect of an end to financial and trade embargos against the country is looming, the head of Total Middle East exploration and production division said.

Speaking after a meeting with Deputy Oil Minister Rokneddin Javadi, Stephane Michel welcomed Tehran's IPC Summit and noted that they have attended the conference to become fully informed of new contracts, Mehr News Agency reported.

"To meet the growing worldwide demand for energy while preparing for the future, we continually innovate to produce sustainable and responsible solutions in oil and gas, solar energy and biomass," he said.

"France's giant is willing to be actively involved in both gas and oil projects in Iran. However, the best options should be scrutinized to choose the most profitable project."

Referring to Total's cooperation with Iran in the past, the official said, "The French supermajor is ready to finance Iranian oil projects and transfer technology to Tehran. Total has vast experience in carrying out (oil and gas) projects in the Middle East, Africa, Brazil and Russia.”

According to Michel, Total will introduce cutting-edge drilling and extraction technologies to slash production costs at Iran’s oil and gas fields.

"Global oil slump has necessitated the cutting of crude production costs for Total.  Iranian officials say the cost of oil and natural gas production in the country is relatively lower than the global average, which makes Iran a destination of choice for foreign investment in the energy sector," he said.

Total was active in developing Iranian energy projects for more than 20 years, including the development of several South Pars phases. Nonetheless, it ceased operations in 2010 following disagreements over contract terms as well as pressure from the French and US governments over oil and trade sanctions against Tehran.

Teaming Up With China

Speaking in a conference for unveiling the framework of the new Iranian oil and gas contracts in Tehran on Sunday, the deputy oil minister said Beijing has always been Iran's strategic partner and cooperation with Chinese oil majors tops the country's list of priority.

"Negotiations are underway to resume collaboration with China Petrochemical Corporation (Sinopec Group) to develop Yadavaran Oilfield's Phase 2, eliminated from the list of available projects for foreign contractors in the new Iranian oil and gas contracts," Javadi said.

Referring to Farzad B Field, the official said talks are being held with India’s ONGC Videsh, the overseas investment arm of explorer Oil and Natural Gas Corp., which submitted a revised proposal seeking the development rights of Iran’s giant gas field.  

Elaborating on the details of the new Iranian oil and gas contracts, known as Iran Petroleum Contract, officially unveiled on Saturday, Javadi said IPC principles have been based on maximizing national interests.

Pointing to IPC as a unique opportunity for domestic and international consortiums, the deputy minister noted that based on the new contracts, the more investors produce, the more benefit they reap.

He announced that field development projects will neither be carried out periodically nor via tenders.

"Iran's recoverable oil reserves stand at 158 billion barrels, accounting for 10% of the world oil reserves," he said.

Javadi believes that Iran's oil production should exceed 25 million barrels a day in the next 25 year so that the country can retain its share in the energy market.

"Plans have been made to increase oil production by 4.7 million bpd by the end of sixth five-year economic development plan (2016-21)," he said.

Financialtribune.com