French energy group Total has said it is pulling back from investing in Iran because the political risk is too high. Rising tension between the West and Tehran over its nuclear programme has made major energy companies reluctant to invest.
Iran’s Oil Minister Gholamhossein Nozari responded that Iran has sufficient expertise and money to develop the field on its own, with or without Total.
South Pars is a multi-billion euro project to super-cool natural gas to liquid for export. Iran’s part of giant field is estimated to hold around 10% of the world’s entire gas reserves.
Total has however sent something of a mixed message as it said it is still in talks to develop Phase 11 of South Pars with nothing decided, but Chief Executive Christophe De Margerie said in a newspaper interview: “Today we would be taking too much political risk to invest in Iran”.
Together with Italy’s Eni and Royal Dutch Shell, Total has already invested billions in Iran’s oil and gas sector, defying the threat of US sanctions. In May, Shell said it would pull out of developing another phase of the South Pars project. Eni and Norway’s StatoilHydro have said they will honour existing contracts in Iran but will not sign new ones.