News ID: 234711
Published: 0355 GMT November 23, 2018

Domestic firms capable to replacing Total in South Pars Phase 11

Domestic firms capable to replacing Total in South Pars Phase 11

Domestic companies can completely take over the stake of Total in the giant Iranian South Pars (SP) Phase 11 gas project after the French oil major bowed to the US pressure and left the Iranian market, an official said.

"We have faith in our capabilities. We know that we can turn sanctions into opportunities," head of the Society of Iranian Petroleum Industries Equipment Manufacturers Reza Khayyamian told ISNA.

"We told President (Hassan Rouhani) not to raise the issue of Total's withdrawal from Iranian market so much and asked him to have more faith in domestic capabilities," he said.

SP Phase 11 is a gas development project aimed at supplying gas for domestic consumption.

The project will have a production capacity of two billion cubic feet per day, equivalent to 400,000 barrels of oil per day, including condensate, Total has said.

Reuters reported in May that the whole reserves of the field, which Iran shares with Qatar, would be worth around $2.9 trillion.

The French company, together with the other partner Petrochina, launched SP Phase 11 project on July 4, 2017 but decided to stop the project after the US President Donald Trump reimposed sanctions on Iran following its withdrawal from the 2015 Iran nuclear deal in May.

China's state-owned energy major CNPC has already announced it is ready to take over Total's stake in the project.

CNPC already holds a 30-percent stake in the field, while Iranian national oil company subsidiary PetroPars holds the remaining 19.9 percent.

Under the terms of the agreement to develop Phase 11 of South Pars, CNPC could take over Total's 50.1 percent stake and become operator of the project.

Khayyamian said Iran can break up the whole project of SP Phase 11 into 100 small projects and then call on small and medium sized European enterprises, who are willing to work in Iran without fear of US punishment, to join the project.

He also regretted that Iran's Oil Ministry has not been able to reimburse domestic companies for their services.

"Our overdue payments need to be cleared so that manufacturers can help (the country) under the current situation (of imposed sanctions)," he added.

Praising the role of Iranian oil equipment manufacturers in the past, he said, "Iran used to buy each kilo of catalysts for $240. But now that we have produced it domestically for $40, the foreign companies have also lowered their prices."

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