Total Signs Major Iran Gas Deal, Defying US Pressure

TEHRAN, July 3, (APP - UrduPoint / Pakistan Point News - 03rd Jul, 2017 ) - French energy giant Total was set to defy US pressure on Monday, signing a multi-billion-dollar gas deal with Iran, the first by a European firm in more than a decade.

Total is to invest an initial $1 billion (880 million Euros) in the South Pars offshore gas field as part of a consortium with Chinese and Iranian firms. It is by far the biggest vote of confidence in the Islamic republic since sanctions were lifted under a 2015 nuclear deal with world powers.

Total's CEO Patrick Pouyanne and Iranian Oil Minister Bijan Namadar Zanganeh are set to sign the 20-year deal, which will eventually see the consortium pour $4.8 billion into the project. Pouyanne will later meet President Hassan Rouhani.

European firms have been hungrily eyeing opportunities in Iran, which has the world's second-largest gas reserves and fourth-largest oil reserves.

But they have been cautious about investing due to continuing US sanctions.

Total has appointed a compliance officer with the sole task of ensuring it does not fall foul of US measures against Iran. In particular, it aims to prevent cash flowing to Iran's elite Revolutionary Guards -- a tall order given their extensive and shadowy presence across much of the Iranian economy.

Just a fortnight ago, the US Senate overwhelmingly passed a bill targeting the Guards over their involvement in regional conflicts and the country's ballistic missile programme. The White House is in the midst of a 90-day review on whether to abandon the nuclear deal entirely, which President Donald Trump threatened to do during his election campaign.

The uncertainty has been enough to deter global firms such as BP from dipping their toes in Iranian waters, while Shell and Russia's Gazprom have signed only preliminary deals to date.