French company Total set to back out of Iran gas project

Fuel Fix:
French energy major Total said it is halting its $2 billion Iranian gas project for fear of facing U.S. sanctions after President Donald Trump opted to abandon the Iran nuclear deal.

Contending that it cannot afford to face penalties, Total said it will unwind all operations on the South Pars gas project in Iran by early November unless it can obtain a special project waiver from the U.S. allowing the project to proceed. Total said it is working with the U.S. and French authorities to discuss the possibility of such a waiver.

Total and its partner, Petrochina, authorized the project last summer, after the U.S. had previously lifted sanctions on Iran for agreeing to suspend its nuclear program. Now that the U.S. is breaking out of the deal, Total said it is unwilling to risk the loss of its U.S. shareholders, financing from U.S. banks and the company's operations within the U.S., including the Gulf of Mexico.
I think the chances of them getting a waiver for the deal out of the Trump administration are probably remote.  I have been critical of the deal in past posts.  This also points to the problem the Europeans and Iranians will have in trying to salvage the deal.  While Iran's economy is in tatters because the government has wasted resources on its proxy wars in Yemen, Syria, and Gaza, some of the mullahs are already threatening to kill Israeli citizens which makes doing deals look like extortion.

Total would be better off investing that money in shale gas operations in the US as well as LNG facilities.


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