Total will pull out of a multibillion-dollar gas project in Iran if it cannot secure a waiver from U.S. sanctions, the French energy company said on Wednesday.
Companies are starting to take matters into their own hands as European and some other governments struggle to save an international nuclear deal with Iran after the United States withdrew and said it would reinstate sanctions on Tehran.
Determined to keep the accord alive, European leaders need to find a way to assure companies that their investments are beyond Washington’s extra-territorial reach.
They also want to persuade Tehran the 2015 deal – which lifted earlier sanctions on the Islamic Republic in exchange for it curbing its nuclear ambitions – is worth sticking to.
Total signed a contract in 2017 to develop phase 11 of Iran’s South Pars field with an initial investment of $1 billion – a contract Tehran repeatedly hailed as a symbol of the accord’s success.
“Total will not continue the SP11 (South Pars 11) project and will have to unwind all related operations before 4 November 2018, unless Total is granted a specific project waiver by U.S. authorities with the support of the French and European authorities,” the French oil and gas major said in a statement.
Total’s announcement comes after German insurer Allianz and Danish oil product tanker operator Maersk Tankers said they were winding down their businesses in Iran. Joe Kaeser, the CEO of Germany’s Siemens, told CNN his company would not be able to do any new business with Tehran.
Iran has said it may start enriching uranium again if it can no longer see any economic benefit to the deal.