Ankara: Iran’s oil minister said on Monday that France’s Total has officially left Iran after the United States threatened to impose sanctions on companies that do business in the country, Iranian state TV reported.

“The process to replace [Total] with another company is underway,” Bijan Zanganeh was quoted as saying, adding that Total was no longer working on its contract to develop phase 11 of the South Pars gas project.

The Oil Ministry’s website Shana also quoted Zanganeh as saying that Total had announced its plans to leave more than two months ago.

Total, which signed the deal in 2017 with an initial investment of $1 billion (Dh3.67 billion), did not have any immediate comment.

Iranian officials had earlier suggested China’s state-owned CNPC could take over Total’s stake in the South Pars gas project, lifting its interest to more than 80 per cent from 30 per cent now.

The United States reimposed sanctions on Iran after Washington withdrew from the 2015 nuclear agreement between Tehran and world powers. The agreement had imposed limits on Iran’s nuclear ambitions in exchange for sanctions relief.

Wary investors

Most of CNPC’s experience lies in its subsidiary China Petroleum Offshore Engineering Company (CPOE), which has worked in shallow waters off north China.

“Once Total quits, that will trigger CNPC to take over automatically, according to the contract,” a senior Chinese industry source with knowledge of the deal told Reuters. “But the question is not about if CNPC is going to take over as the operator, but if CNPC could deliver and advance the project without Total.”

China also faces challenges supplying equipment such as large-scale compressors needed for developing the giant gas project, as leading manufacturers could be barred from supplying to Iran under US sanctions.

The United States will impose tougher sanctions in November which will target Iran’s oil sales and banking sector.

Iran’s rial currency has lost about half of its value since April because of a weak economy, financial difficulties at local banks and heavy demand for dollars among Iranians who fear the effects of sanctions.