After Iran Move, Total to Snap Up Qatar Gas Deals

After Iran Move, Total to Snap Up Qatar Gas Deals
After Iran Move, Total to Snap Up Qatar Gas Deals

Total is well placed to take a lead role in helping Qatar expand output from the world's largest gas field, thanks largely to its involvement in the Iranian side of the shared deposit, two sources familiar with Doha's thinking said.

That puts the French oil major ahead of rivals like Exxon and Shell in the early running for developing the expansion, which the Persian Gulf state announced as it seeks to counter growing isolation caused by a regional diplomatic rift, Reuters reported.

Total CEO Patrick Pouyanne signed a deal this month to develop the South Pars Gas Field, as Iran's part of the shared reserves is known, becoming the first oil major to return to the country since the lifting of sanctions.

As he was ironing out details of that agreement, Pouyanne was careful to keep Qatar in the loop.

"Of course, I will not go to the same field in Iran without telling Qatar," he said.

"The Iranian block where we are supposed to produce is next to the border with Qatar. When I traveled to Doha, I discussed it with the Qatari authorities and they told us: 'It is ok—we know you'."

Pouyanne said Total strictly respects confidentiality of data vis-a-vis each country. The executive's cross-border strategy, however, appears to be paying early dividends.

"I would expect Total to be in the strongest position for the new Qatari project, because of the political issues at play and their recent deals in Iran's South Pars," one senior Persian Gulf energy source said.

At one level, working with both countries who share a prized gas asset seems obvious, but it is not without risks for Total.

Saudi Arabia, the UAE, Bahrain and Egypt have imposed political and economic sanctions on Qatar over what they have described as Qatar's destabilizing activities in the region. Qatar denies the accusation.

Besides Iran and Qatar, Total also has large projects in Saudi Arabia and the UAE, highlighting the complexity of investing in the Middle East.

Exxon, Shell and Total declined to comment on plans to participate in Qatar's tenders to expand gas capacity, which are yet to be announced and will take several years to complete.

Even without those tenders, Total's role in Qatar is set to grow significantly after it won a 30% stake in 2016 in a new 25-year contract to operate its largest offshore Al-Shaheen oilfield.

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