News ID: 209569
Published: 0413 GMT February 06, 2018

Total continuing work on South Pars project: Pouyanné

Total continuing work on South Pars project: Pouyanné

South Pars project is "progressing well, without delay", and Total continues to work, even if the situation with the US Congress is rather vague, said the French oil giant's CEO.

In an interview with French newspaper Le Monde looking at Total's strong performance in 2017, Patrick Pouyanné was asked about the 'American threat' to the company's 'important gas project' in Iran.

Pouyanné's forthright response marks perhaps the first time that a major European executive has publicly called for a diplomatic intervention to protect commercial interests in Iran.

He noted that even if the Americans "decide to exit the nuclear agreement and if secondary sanctions return in place", it would pose a 'real question' for the French energy giant.

However, echoing comments made to reporters on the sidelines of Davos World Economic Forum Annual Meeting in Switzerland, Pouyanné did not cast snapback as an automatic game-over for the South Pars project. Rather, he suggested that it was necessary to "clarify the horizon for European business working in Iran".

He explained that Total has been in discussions with French and European authorities about the "means to protect investments already made in Iran, even in the case of the return of sanctions".

Pouyanné pointed to the experience of European blocking statutes and sanctions waivers applied in the 1990s which proved sufficient to protect Total's gas projects at the time. Pouyanné concluded by noting that it is "up to European diplomats to consider these questions".

The confidence of Pouyanné's response stands in stark comparison to the general uncertainty that has gripped the business community and will be seen as an important signal. The landmark $3.8-billion South Pars project is seen as a bellwether for the larger project of Iran's post-sanctions economic recovery.

However, Total is far from the only major European multinational engaged in the Iranian market. Pouyanne was one of select group of European CEOs invited to dine with Donald Trump at a special dinner held during the American president's trip to the World Economic Forum in Davos.

Other guests included Siemens CEO Joe Kaeser, ABB CEO Ulrich Spiesshofer and Volvo CEO Martin Lundstedt. Overall, nine of the fifteen companies represented at the dinner are currently active in Iran, and a further five have had a historical presence in the market. Pouyanné’s peers are likely to share his sentiments on the need to protect European interests in Iran and the wider global economy.

In a recent survey conducted by Bourse and Bazaar and commissioned by International Crisis Group, a substantial 54 percent of senior executives indicated that "assuming Iran remains committed to the nuclear deal", blocking statutes, which would protect companies from US penalties, would positively affect the "decision to invest in Iran".

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