Total Awaits CNPC Decision on South Pars Stake

Total is awaiting a decision by China National Petroleum Corp. on whether it will take over its stake in the development of Iran's giant South Pars Gas Field, the company said on Monday.

The French company's potential exit comes against the backdrop of the threat of US sanctions on Iran, which are forcing international companies to reconsider their dealings with Iran, S&P Global Platts reported.

Iran has the world's largest proven offshore natural gas reservoir in the Persian Gulf.

Operating the project with a 50.1% stake, Total is partnered by China's CNPC (30%) and Iran's Petropars (19.9%).

The partners signed a $4.8-billion deal with Iran last July, becoming the first major western energy company to invest there since previous sanctions over its nuclear power program were lifted at the start of 2016.

"The contractual process is still ongoing and for our part, we have not been informed of an official CNPC position, but as we have always indicated, CNPC, a Chinese state-owned company, has the right to take over our participation if CNPC decide it," a Total spokesman said on Monday.

Total CEO Patrick Pouyanne said on July 7 the threat of US sanctions was making it impossible again for international energy companies to work in Iran.

 A month earlier, the company said it had halted development plans, having invested less than €40 million ($46 million) in the project, but was lobbying the US government for a waiver.

Officials have since sent mixed messages about the status of the project. Mohammad Mostafavi, director of investment at the National Iranian Oil Company, told IRNA on Saturday that CNPC had taken over Total's share in the gas project, giving it an 80.1% stake.

However, his comments were later contradicted by the Oil Ministry's official news agency Shana.

"Members of the consortium in charge of developing Phase 11 of South Pars will fulfill their roles as set forth in the provisions of the agreement and no modifications have been made to the provisions of the contract," Mostafavi was later quoted as saying by Shana on Sunday.