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Chinese company could take over France's energy giant's gas project in Iran, following US sanctions

Phase 15 and 16 at Iran's South Pars gas field [Getty]

Date of publication: 12 August, 2018

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US sanctions targeting Iran could force France's Total to cede a giant gas project to China.

A senior Iranian official denied China's state-owned CNPC will take over Total's share in a new gas project, just hours after the state-run IRNA news agency quoted him saying it would.

"The role of the members of the consortium developing this project is in accordance with the provisions of the contract, and there is still no formal change in these provisions," said Mohammad Mostafavi, director of investment at Iran's state oil firm NIOC.

There was no immediate explanation for the discrepancy.

Total is developing Phase 11 of the South Pars field - the world's biggest gas field - and will invest $1 billion.

The French oil giant is the first Western company to invest in Iran after sanctions were lifted following the 2015 nuclear deal.

US President Donald Trump announced in May Washington would withdraw from the historic accord and reimpose sanctions on Iran, with the first set taking effect on 7 August. 

Total has previously warned it would pull out of the contract unless the US issues a sanctions waiver. 

Gholamreza Manouchehri, the deputy head of NIOC, also previously said CNPC would take over Total's contract should it be forced to walk away. 

Total has until 4 November - when the second set of sanctions that target Iran's oil sector take effect - to wind down its operations in the country of face penalties from the US. 

There was no immediate comment from CNPC and a Total spokesperson declined to comment, Reuters reported. 

It is unclear what will happen to Total's 50.4 percent share in the gas project. CNPC holds a 30 percent stake, with Iran's Petropars having the remainder.

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