“If the US decides to put back the sanctions, we have to look at what the consequences are…and then we will see, either Donald Trump decides to maintain the waivers and we will move on with the project,” Patrick Pouyanne said in an interview in Abu Dhabi on Sunday, thenational.ae reported.
“If the US decides not to sign the waiver, then what will be our position, it’s quite simple – as the project has been awarded prior to that decision during the period of time that we could sign … we will argue that we should benefit from the grandfather clause and we will ask for a waiver from the US authorities.”
In July last year, Total became the first Western energy company to sign a deal with Iran when it agreed as part of a 20-year contract to develop Phase 11 of the country’s South Pars field, the world’s largest gas field that is shared with Qatar. The project will have a production capacity of 2 billion cubic feet per day or 400,000 barrels of oil equivalent per day including condensate. The produced gas will supply the Iranian domestic market starting in 2021.
In January, Trump set May 12 as the deadline to decide whether the US will reimpose sanctions that were lifted as part of the Joint Comprehensive Plan of Action (JCPOA) nuclear deal that imposed limits on Iran’s nuclear program. He said European countries that are party to the agreement must address “terrible flaws of the Iran nuclear deal.”
The ultimatum has pressed Britain, France and Germany to seek ways that will mollify the American president and preserve the deal. The three European countries are considering a new set of sanctions that target Iran’s ballistic missiles and Tehran’s role in seven-year war on Syria, Reuters reported on Saturday.
In the wider context “Total is a small matter of a contract…it's more the diplomatic tension,” said Pouyanne. “What is more important is the debate, a consequence of the negative US decision on the stability of the region.”
Prior to the nuclear agreement, Iran’s economy was crippled by years of sanctions that led to hyperinflation and drying up of foreign investment. The country, which relies on oil revenue saw its crude production fall to about 2.5 million bpd with exports limited to a million barrels a day. The nuclear agreement allowed Iran to nearly double its oil and condensate production to 3.8 million bpd allowing it to boost its foreign exchange reserves. The budget continues to rely on oil receipts for about 40 percent of its total revenue, according to the International Monetary Fund.
“Our intent is to do all that we can to execute the contract that we signed…. We have good arguments to explain…This contract, it’s a contract for domestic gas to help the people in Iran. It’s not an export contract,” said Pouyanne.
Patrick Pouyanné, Total’s new chief executive, said his company will file for a waiver if the US withdraws from the Iran nuclear deal and sanctions are reimposed on Tehran.