Total plans stake in $2b Iran project

Paris: French Total SA may take a stake in Iran's $2 billion Azadegan oil project under an agreement with Japan's Inpex Holdings Inc., a Total spokesman said yesterday.

A contract to develop the field possibly one of the world's largest untapped oil reserves could put both firms at odds with the US, which is pressing for international sanctions against Iran because of its nuclear programme.

"We have a strategic agreement with Inpex which includes taking a stake in the project if that's decided but this is not yet the case," spokesman Paul Floren said. He gave no further details.

An Inpex spokesman could not confirm any agreement with Total. He noted: "International joint ventures are a common industry practice to run any energy projects smoothly."

Stalled talks

Inpex has yet to finalise its 2004 deal with Iran, which holds the world's second biggest oil and gas reserves, to develop the Azadegan field. Oil from the field would go some way to meeting resource-poor Japan's energy needs.

Talks have stalled over issues including steel costs and landmines left over from the 1980-88 Iran-Iraq war.

A senior Iranian official told Reuters on Saturday Iran and Inpex had reached an understanding over developing the field, which has an estimated 26 billion barrels of reserves in place and lies in southeast Iran, near the border with Iraq.

Inpex has until September 15 to finalise the deal or Tehran may offer the giant field to Russian, Chinese or Iranian companies.

Tehran failed to heed an August 31 deadline set by the UN Security Council to halt uranium enrichment.