Total Stops Iran Gas Project as Risk From Sanctions Too High
https://www.rigzone.com/news/wire/total_stops_iran_gas_project_as_risk_from_sanctions_too_high-16-may-2018-154631-article/Total SA said it will not risk investing in Iran following the return of U.S. sanctions, unless it can secure a waiver.
Continuing to do business in Iran would be too great a risk as the company has large operations in the U.S. and depends on the country’s banks for financing its operations, Total said in a statement Wednesday. So the French energy giant won’t commit any more funds to Iran’s South Pars 11 project, in which it took a controlling stake last year.
The comments from Total -- the first Western oil company to sign binding agreements to develop Iran’s oil and gas fields following the end of a previous round of sanctions in 2015 -- illustrate the challenge posed by renewed U.S. restrictions. While the French company was speaking about a natural gas project, its reluctance to continue operating there could equally apply to others that rushed back into sectors from automobiles to aviation and engineering to the oil trade.
“The risks of being on the wrong side of the U.S. government are not worth the benefits of trading with Iran once the sanctions are in place,†said Jason Gammel, a London-based analyst at Jefferies LLC. “Oil companies are not going to be able to invest in the upstream sector, traders and purchasers of Iranian crude are going to have to find other sources, or seek an exemption from the U.S. government to be able to continue buying.â€...
