PARIS: French oil and energy company Total said on Wednesday that may pull out of the Iran South Pars 11 (SP11) energy project, in light of a decision by US President Donald Trump to withdraw from an international nuclear deal with Iran.
Trump’s decision to withdraw from the 2015 nuclear deal with Iran risks exposing European countries that have since invested in Iran to renewed US sanctions, after “wind-down” periods of three to six months expire.
Total’s position shows how difficult it will be for European powers to safeguard their interests in Iran and offer guarantees to save the nuclear deal.
Iran's economy is expected to feel the bitter chill of new sanctions.
France, Britain and Germany had vowed earlier this week to keep the 2015 nuclear deal alive by trying to keep Iran’s oil and investment flowing, but admitted they would struggle to provide the guarantees Tehran seeks.
“On 8 May 2018, President Donald Trump announced the United States’ decision to withdraw from the JCPOA (nuclear agreement) and to reinstate the U.S. sanctions that were in force before the JCPOA’s implementation, subject to certain wind down periods,” Total said in a statement.
It added that as a consequence, “Total will not continue the SP11 project and will have to unwind all related operations before 4 November 2018, unless Total is granted a specific project waiver by US authorities with the support of the French and European authorities.”
Total said it would not be making any further commitments towards the Iranian South Pars project for now, and added it was engaged with French and U.S authorities over the possibility of a waiver to the project.
The French company said it had so far spent less than 40 million euros ($47 million) on the South Pars project, and that pulling out of it would not impact the company’s general production growth targets.