Iranian Oil Minister Bijan Namdar Zanganeh said French energy giant Total has a time limit of 60 days to negotiate with the US about its major deal on the development of Iran’s South Pars gas field.
Zanganeh said Total and the French government can hold talks with the US in the next two months to see whether or not the company would stay in the project in Iran.
The minister added that if the US government does not agree with Total’s remaining in the deal, Iran would replace the company with China National Petroleum Company (CNPC).
Earlier this month, Zanganeh said that should France’s Total pull out of the gas deal, the Chinese company will own Total’s stakes in the project.
He explained that the French company will not be fined for pulling out of the contract, but added that Total’s expenditure on the contract will not be paid back until completion of the project.
In July 2017, Total signed the $1 billion deal to develop the South Pars gas field in southwest Iran.
According to the agreement, CNPC could take over Total’s 50.1 percent stake and become operator of the project if Total withdraws from Iran.
CNPC has now a 30 percent stake, while PetroPars holds the remaining 19.9 percent.
Total faces losses of several tens of millions of dollars if it pulls out of the project.
The French energy company announced on May 16 that it may pull out of South Pars deal in light of a decision by US President Donald Trump to pull his country out of the 2015 Iran nuclear deal.
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 US 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.