French energy company freezes Iran project

Times:

Tehran faced deeper isolation yesterday after a major Western energy company withdrew from a giant Iranian gas field project and international threats to attack the country’s nuclear facilities grew.

Total, the French energy group, said that it was freezing its role in a $10 billion project to develop the South Pars fields in the Gulf, the world’s largest gas reserves. The decision was a big step in a US campaign to put pressure on Iran to stop enriching uranium.

Iran’s decision to carry out missile tests — with a second round yesterday — also prompted Ehud Barak, the Israeli Defence Minister, to suggest that his country was ready to launch a pre-emptive strike if necessary. “Israel is the strongest country in the region and has proved in the past that it does not hesitate to act when its vital security interests are at stake,” Mr Barak said. Tehran had said this week that Tel Aviv would be “set on fire” if Israel were to attack.

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Washington has put pressure on the French group after Shell and Repsol, the Spanish company, withdrew from other Iranian projects this year.

Tehran needs technology that only the Western groups possess in order to extract and liquefy gas from the field. It could turn to Gazprom but the Russian energy giant lacks the necessary expertise, industry experts said.

Russia may also not be keen to help Iran to create a rival to its own domination of Western Europe’s gas supplies. Tehran expected South Pars to produce 751 million cubic metres (26 billion cubic feet) of natural gas a day when completed by 2014.

Total had been hoping to continue with South Pars, which has been in suspension since 2006, but it bowed to pressure from Washington and from President Sarkozy, a strong supporter of the drive to force Tehran to stop enriching uranium. Total was not given an order but it was told further involvement in Iran would be unwelcome.

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The economic isolation appears to show new seriousness on the part of the Europeans in dealing with Iran. By willfully ignoring attempts to work out an agreement on its nuclear activity Iran has made itself much poorer. You have to ask why they would be willing to do that and the only rational answer is they are determined to build a bomb.