Total to quit Iran project; to handover to China’s CNPC

French oil giant Total is pulling out of a multibillion-dollar gas project after failing to secure a waiver from US sanctions that will go into effect against Iran’s energy sector in November. Total says it is now awaiting word from CNPC on whether China’s state-owned energy major will take over the French oil company’s stake in Iran’s giant South Pars Gas Field.

The French oil major owns 50.1% of the South Pars project, with CNPC taking another 30% and Iran’s Petropars having a 19.9% stake.

CNPC is reportedly considering taking over the majority stake from Total, which signed a US$1 billion deal in 2017 to develop phase 11 of the South Pars Gas Field.

The contract, signed in the wake of the landmark 2015 nuclear deal with Iran, gave CNPC the option to take over Total’s stake if it pulled out.

Director of investment at the National Iranian Oil Company (NIOC) Mohammad Mostafavi is quoted as having said that the contract remains unchanged.

“The role of the members of the consortium developing this project is in accordance with the provisions of the contract, and there is still no formal change in these provisions,” he told the Ministry of Oil’s Shana news outlet.

Total faced a 60-day deadline set by Iranian Minister of Oil Bijan Namdar Zangeneh to secure a waiver from the US or withdraw from the project, and it expired in July.

China – Iran’s No. 1 customer – has opposed unilateral US sanctions on Iran and pledged to maintain trade with the country.

The world’s No. 2 economy is reportedly gearing up to take up more of the Iranian oil that other nations won’t buy because of the threat of US sanctions.