Paris (CNSNews.com) – Days after news broke that French oil and gas giant Total is pulling out of a multibillion dollar deal in Iran due to the threat of U.S. sanctions, the French government has made no public comment on the issue.
Total, which signed the $4.8 billion contract to develop a portion of the world’s biggest natural gas field just 13 months ago, said its efforts to win a waiver from the Trump administration had failed.
“Total has notified the Iranian authorities of its withdrawal from the contract after the 60-day deadline for obtaining a possible waiver from the U.S. authorities, which could not be obtained despite the support of the French and European authorities,” the company said in a statement to CNSNews.com.
Earlier, Iranian Oil Minister Bijan Namdar Zanghaneh announced that “Total has officially terminated the agreement for the development of phase 11 of the South Pars gas field,” and added that “the process to replace with another company is underway.”
The Total deal to develop a section of the giant gas field was in partnership with China’s state-owned China National Petroleum Corporation (CNCP), and Petropars, a subsidiary of the National Iranian Oil Company.
There has been no public reaction to the withdrawal decision from French President Emmanuel Macron, or the foreign or economy ministries.
But in a radio interview last May, however, Economy Minister Bruno Le Maire criticized the U.S. decision to sanction companies that do business with Iran, saying it was “not acceptable that the United States acts as the economic policeman of the planet.”
French media reports say Total had already invested $50 million in the project, and is seeking compensation for the transfer of its part of the deal to CNCP. Total declined to comment on the claim.
The Total spokesperson said the company has “not been informed of an official CNPC position, but as we have always indicated that the Chinese company has the right to take over our participation if it decides to do so,”
Total had a 50.1 percent stake in the project, and if the Chinese company takes over the Total share it would increase its stake from 30 percent to more than 80 percent.
Some experts have told French media that CNCP is not keen in taking over Total's stake, as its main financial channels, through the United Arab Emirates and Turkey, are closing due to the sanctions. One told the financial publication Los Echos that CNCP does not want to risk angering the U.S. by becoming the project’s main stake holder with 80 percent.
With assets in the United States totaling some $10 billion and U.S. banks involved in 90 percent of its financial operations, Total would have been hard hit if it remained in Iran.
Reacting to the pullout decision, Shahin Gobadi, a Paris-based member of the exiled opposition group National Council of Resistance of Iran (NCRI) foreign affairs committee, said the West in general and Europe in particular should “realize the reality” that Iran is the world’s foremost state sponsor of terrorism.
“Any business with this regime only provides assistance to its suppression apparatus at home and terror machine abroad,” he said. “The only solution is firmness.”
President Trump last May withdrew from the Joint Comprehensive Plan of Action (JCPOA) nuclear deal, and sanctions lifted under the 2005 agreement are being reinstated in stages. Measures targeting the energy and banking sectors are due to be restored in early November.
Total had already announced in May that it would pull out of the contract if it could not get a waiver from the U.S. authorities. Despite having the support of the French government and European allies it was unsuccessful.
(National Security Advisor John Bolton said on Wednesday the administration intends to grant few waivers on the Iran sanctions.)
A number of European companies have already announced their departure from Iran or are – as in the case of French automaker Renault – are curtailing their activities while awaiting developments.
Those leaving include another French automaker PSA (whose products include Peugeot, Citroen, Opel and Vauxhall) and Air Liquide, a French multinational company that supplies industrial gases and services to medical, chemical and electronic industries.