23:15 GMT +321 August 2019
Listen Live
    Gas refinery at the South Pars gas field on the northern coast of Persian Gulf in Asalouyeh, Iran

    France Engages in Development of Iranian Gas Fields as US Mulls New Sanctions

    © AP Photo / Vahid Salemi
    Opinion
    Get short URL
    130

    France’s energy giant Total is establishing a foothold in the Iranian gas market, which is very important for the company and the country, while the United States is trying to isolate Iran and therefore risks losing the country’s gas market completely, experts told Sputnik.

    TOTAL’S NEW CONTRACT

    On Monday, Total, together with China’s National Petroleum Company (CNPC) and the National Iranian Oil Company (NIOC) signed a 20-year contract for development of phase 11 of Iran’s South Pars field (SP11), the world’s largest natural gas field.

    The project will have a production capacity of 2 billion cubic feet per day, with the produced gas starting to supply the Iranian domestic market in 2021, Total said in a statement.

    "Total has never entirely left Iran. Even amid the crisis the company tried to maintain its presence in the country. For them, it was a security deposit, because the stakes were too high," Thomas Flichy de La Neuville, a coordinator of the French military experts’ group SYNOPSIS and a specialist in Iranian affairs, told Sputnik.

    Total is not playing against the United States, but only playing for itself, while the United States are too busy dealing with internal issues to "pursue a competent policy in the Middle East," the expert added.

    "Too many contradictions between the State Department, Pentagon and various agencies," La Neuville explained.

    He added that the contract was signed despite the fact that the relations between Iran and France deteriorated over the past years. This, La Neuville explained, signified that there was "sympathy" between the countries, which allows for revival of the dialogue.

    As for the latest US sanctions against Iran, introduced in 2017, Total is undertaking certain precautions in order to preserve the sanctions regime, violation of which "could turn against European companies," Milad Jokar, a member of the Institute for European Prospective and Security, told Sputnik.

    US AND IRAN

    The United States introduced a new round of sanctions against Iran in February in response to Tehran's medium-range ballistic missile test in January. In June, US Senate approved further amendments on the Iranian sanctions’ bill that still need to be approved by the House of Representatives and President Donald Trump.

    "Total appointed a special person, whose only task would be to control that the sanctions are not violated, excluding the nuclear program sanctions, because they were lifted," Jokar explained.

    If the United States try to "punish" European companies for doing business with Iran, "it will be considered a violation of the nuclear deal signed in 2015" by the P5+1 group of countries, namely China, France, Russia, the United Kingdom, the United States and Germany, and Iran, Jokar said, adding that European states would oppose Trump’s desire to economically isolate Iran.

    The 2015 Joint Comprehensive Plan of Action (JCPOA) stipulated gradual lifting of the economic and diplomatic sanctions previously imposed on Iran in exchange for Tehran maintaining a peaceful nature of its nuclear program. The plan’s implementation began in January 2016.

    Jokar added that US companies were also interested in the Iranian market, stressing though that Trump’s desire to isolate Iran "runs counter to these plans."

    La Neuville confirmed that the United States never stopped holding negotiations with Iran on gas contracts, as many "pragmatic people" understand the importance of the Iranian market and the possible distribution channels and "use any opportunity to sign contracts."

    "The behavior of Trump, who is described as a businessman, is surprising, because isolating Iran means putting an end to the US business in Iran. It means creating conditions in Iran for other countries. It means pure losses for the United States," Jokar explained.

    RUSSIA AND OTHER PARTNERS

    In March, Iranian President Hassan Rouhani arrived in Russia with a visit, during which the countries signed 16 cooperation agreements in various fields, including exploration of oil and gas fields. According to Russian Deputy Energy Minister Kirill Molodtsov, the total volume of Russian companies’ investments in the oil and gas sector of Iran can amount to more than $20 billion.

    The new agreement with Total should not affect Tehran’s "friendly and economically complementary" relations with Moscow, La Neuville said, stressing that Iran aims to pursue a balanced policy and does not want to step aside from its previous partners that "supported him in difficult times."

    Jokar, in his turn, stated that Iran’s economic openness had a positive influence not only on the bilateral relations of the country, but also on the relations within the entire region, creating "a platform for contacts in the region."

    Related:

    US Gas in Europe: Can Trump Really 'Sell' American LNG to Europeans?
    Serbia Mulls Becoming Hub for Russian Gas Amid Ever-Present 'Political Risks'
    Serbia Would Benefit From Pipeline for Russian Gas Via Bulgaria
    Tags:
    energy, gas, contract, sanctions, Joint Comprehensive Plan of Action (JCPOA), Total, United States, France, Iran
    Community standardsDiscussion
    Comment via FacebookComment via Sputnik