Total has signed a memorandum of understanding with the Research Institute of Petroleum Industry, a subsidiary of Iran's Oil Ministry, which is the French company's second deal with Iran after the lifting of sanctions in January.
Mehr News Agency cited an unnamed source at the Oil Ministry as saying that the MoU encompasses cooperation in the fields of research and development and transfer of technology in the oil sector.
But the nature of the agreement is largely under wraps amid reports that the French giant is eying the ambitious South Azadegan project.
Iran's Oil Minister Bijan Namdar Zanganeh said on Monday that based on the MoU, Iran will provide the company with information on South Azadegan. He stressed that a final contract is yet to be reached.
Total is one of the six supermajor oil companies in the world. Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum marketing and international crude oil and product trading.
The French company is also a large-scale chemicals manufacturer.
Total signed a deal in January to import 160,000 barrels per day of crude from the Persian Gulf country. The deal made the French company the second importer of Iran's crude in Europe, after Hellenic Petroleum, Greece's biggest refiner, following the lifting of sanctions against Iran on Jan. 16.
Total was active in developing Iranian energy projects for more than 20 years, including the development of several South Pars phases.
But it ceased operations in 2010 following disagreements over contract terms and pressure from the French and US governments over oil and trade embargos against Tehran.
------- Investment Needed
Seyyed Mahmoud Marashi, the newly appointed director of South Azadegan Development Project, has estimated that under $5 billion are needed for the development of the second phase of the field.
Marashi added that while holding negotiations with Total, Iran has been in talks with other foreign contractors, such as the French Entrepose Group, the South Korean Hyundai and the Japanese Marubeni.
Earlier last month, Abdolreza Haji-Hosseinnejad, managing director of Petroleum Engineering and Development Company, told IRNA that the Japanese company intends to work in the processing units of South Azadegan and in Kish Island’s oilfields.
South Azadegan Oilfield is located 80 km west of Ahvaz in Khuzestan Province along the Iran-Iraq border and shared by the two states. The development project aims to produce 600,000 barrels of crude oil per day (320,000 barrels in the first phase, which will be increased by 280,000 barrels in the second phase counting early production).
Under a $2.1 billion contract, South Azadegan's project has made 20% progress and is expected to be fully exploited by March 2017.
South Azadegan was one of the projects introduced to foreign contractors under new Iran Petroleum Contracts in an international conference held last year in Tehran.
Under IPC terms, foreign contractors have to choose an Iranian partner to undertake a project in Iran’s oil and gas industry.
The RIPI has been host to representatives of many international oil companies, including Total, in recent months.
According to speculations, the French company and the Iranian institute are likely to cooperate in developing the second phase of South Azadegan.
