Total Wants Guarantee Against Sanctions

Total Wants Guarantee Against SanctionsTotal Wants Guarantee Against Sanctions

A senior official of Total said the French company wants to be guaranteed of business continuity and safe investment in Iran in the face of western sanctions that can be snapped back into place.

"Total's new contracts [with Iran] should be [devised] in a way that the return of sanctions do not pose a risk to them," Stephane Michel, the head of Total's Middle East exploration and production division, was quoted as saying by Mehr News Agency.

The official made the statement in a meeting with Amirhossein Zamaninia, Iran's deputy oil minister, in Tehran on Tuesday.

"The possible return of sanctions is an important issue and a major concern for investors who want to operate to Iran," Michel said. Iran and six world powers reached a landmark agreement in July on putting time-bound curbs on Tehran's nuclear program in exchange for some sanctions relief.

Sanctions were officially lifted on Jan. 16, but the so-called snapback mechanism of the agreement allows the US and the EU to swiftly reimpose sanctions if the Islamic Republic does not hold its own end of the bargain in the nuclear deal.

Earlier this week, the Oil Ministry and Total signed a memorandum of understanding for research and development and transfer of technology in the oil and gas sector.

This was the second deal between Iran and Total after some western sanctions against the Islamic Republic were lifted last month. Total reached an agreement in January to import up to 160,000 barrels of crude a day from Iran.

But the French major is eying a bigger piece of Iran's lucrative energy market. Total reportedly has been discussing terms to reserve the rights to develop South Azadegan Oilfield–a largely untapped field shared between Iran and Iraq.

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 as well as pressure from the French and US governments over oil and trade sanctions against Tehran.