Deadline for Total's S. Azadegan Proposal

Deadline for Total's S. Azadegan ProposalDeadline for Total's S. Azadegan Proposal

An Iranian deputy oil minister said Total S.A. has six months to give its development proposal for South Azadegan Oilfield, a giant field shared between Iran and Iraq in the Persian Gulf.

"Total is given six months to produce a technical and operational proposal to develop South Azadegan … There is no obligation to submit a price tag or [estimate] the cost at the end of the six-month period," Rokneddin Javadi was quoted as saying by Mehr News Agency on Wednesday.

He added that a memorandum of understanding has been signed with the French oil and gas giant, but "that does not mean the project will be delegated to Total".

Total signed an MoU in March with the Research Institute of Petroleum Industry, a subsidiary of Iran's Oil Ministry, on research and development and transfer of technology in the oil sector.

Later that month, a report circulated that Total had signed a non-disclosure agreement with Tehran to develop South Azadegan Oilfield.

Officials clarified that the agreement was an MoU to conduct technical surveys on South Azadegan, stressing that Total should separately bid along with European rivals to secure the drilling rights for the field.

But Total's new arrangements with Tehran appear to put the company in pole position to win the development rights for one of Iran's most sought-after oilfields, given the company's track-record in Iran and its thawing relations after the removal of sanctions against Tehran in January.

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.

However, Javadi insisted that Total will have to compete on an equal footing with its European and Asian rivals to secure its grip on South Azadegan.

"If several companies bid for an oilfield, that project will be put out to tender," Javadi noted.

The state-run China National Petroleum Corporation was handed the development of North and South Azadegan oilfields, but it was booted out of South Azadegan in 2014 after repeated delays in fulfilling its contractual obligations, although it has fared better in the South project.