French oil firm Total has returned to Iran in a big, big way.
Total is signing a $2 billion deal to start a long-term investment project to help develop Iran’s South Pars gas field.
“Today again we are the first international company to come back to Iran,” said Total CEO Patrick Pouyanne at the signing ceremony.
“It is a great source of pleasure and pride to continue this story and to have the opportunity to sign the South Pars 11 contract,” he said.
At a signing ceremony in Tehran, Total’s chief executive Pouyanne said his company planned to optimize the field’s production through a 20-year commitment.
The China and Iran’s state oil firms are putting up another $2.8 billion.
Iran is seeking a total of $32 billion in foreign investment to build 25 new petrochemical plants.
“We need foreign investment in the Iranian oil sector,” said Iran’s Oil Minister Bijan Zanganeh.
“Our prospect is to produce around 6 million barrels of crude oil and gas condensate by the end of the sixth development plan,” he said.
The French petroleum giant withdrew from Iran in 2010 after the Western world imposed sanctions on Iran to halt its nuclear program.
With the signing of an international agreement to suspend weapons research and the subsequent lifting of sanctions, Iran has drastically increased its energy production—and companies eager to share it its petroleum wealth have reopened negotiations.
Iran holds 9 percent of the world’s proven oil reserves and 18 percent of the planet’s natural gas, according to British Petroleum’s (BP) Statistical Review of World Energy.
Iran’s South Pars gas field is believed to be the biggest in the world.
It is here that Total has elected to invest some $2 billion in a joint deal with China’s state oil company CNPC and Iran’s Petropars. Total is buying a 50.1 percent stake in the South Pars project. CNPC will own 30 percent and Petropars, 19.9 percent.
According to Iran’s state news agency, the deal is supposed to total $4.8 billion—to start. The projected cost of the next stage of development was not announced.
Iran’s energy ministry expects the project to produce $54 billion worth of gas over time, based on current prices.
Total says it expects the project to produce two billion cubic feet of gas per day, or 400,000 barrels of oil equivalent per day, including condensate.
Part of the Pars field is claimed by Qatar.