Iran to Finalize Gas Deal With Total Within 2 Months

Oil Minister Bijan Namdar Zanganeh said the National Iranian Oil Company and French energy giant Total are still discussing the detail of a contract to develop Phase 11 of South Pars following a preliminary agreement signed in November.

"Talks are underway and the agreement will be finalized in two months as the two sides are thrashing out the details," Zanganeh was quoted as saying by Mehr News Agency on Tuesday.

Highlighting the importance of collaboration with Total, Zanganeh noted that NIOC is making efforts to conclude a final agreement with the company.

Based on the agreement, Total will raise gas production from Phase 11 to around 51 million cubic meters per day in 20 years in tandem with China National Petroleum Corp and an Iranian partner.

Reflecting on Total CEO Patrick Pouyanne's statements that the company's future in Iran depends on the renewal of US sanction waivers, Zanganeh said, "As far as I know, the European Union policy is not to follow what the United States dictates. We are proceeding with the technical and commercial aspects of the deal, yet I do not know why Total made the comments."

Pouyanne had said that either the waivers will be renewed "or they (the US) decide to tear up the Iran nuclear agreement. In that case, we'll not be able to work in Iran".

According to the rapporteur of Majlis Energy Commission, Asadollah Qarekhani, no deal has been signed with Total, but the experts are conducting studies on the gas field.

Noting that there is no proof the company has revealed secret information about the field to Qatar, Qarekhani said, "Total's officials needed more information about the gas field, that is why their survey is not complete yet."

Ali Kardor, managing director of NIOC, also reacted to speculations that Total may backtrack on the South Pars mega project.

"Serious negotiations are underway with Total in Tehran," Kardor was quoted as saying by ISNA on Tuesday, adding that Total has rejected claims regarding their unwillingness to develop the field, "blaming the press for misinterpreting their words".

--- No IPC Deal Yet

According to Hedayatollah Khademi, a member of Majlis Energy Commission, no agreements based on the new Iran Petroleum Contract, aka IPC, has been concluded and foreign firms, including Total, have just signed heads of agreement, which are non-binding documents that set out the key terms of a proposed agreement between parties. 

Gholamreza Manouchehri, the deputy for development and engineering at NIOC, said Total is keen to expand its footprint in Iran's petroleum industry.

"We are discussing upstream projects and production of oil and gas equipment as well as drilling and offshore services," he said.

Manouchehri asserted that collaboration between Iranian and French companies will boost the pace and quality of drilling operations and manufacturing of equipment.  

Total was active in developing Iranian energy projects for more than 20 years, including in South Pars. 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.