Total shares are trading higher Monday, amid reports the French energy major has pulled out from the gas field development project in Iran. Iran’s oil minister has shared the news, according to a Reuters article. Total has yet to confirm the news, or share any details.
By 1305 BST, Total shares were 1.44% higher at €53.06. The stock has been moving lower during the past couple of weeks.
Total leaves Iran amid US sanctions
Total’s reported decision to abandon its gas field development project in Iran, likely stems from a failure to achieve a sanctions waiver from the US.
The move comes as US sanctions against Iran take hold and companies and countries who do business with Iran, without an agreement with the US, could face a colder relationship with the US.
“Total Iran has officially left the contract to develop the South Pars Gas project's phase 11... the process to replace with another company is underway,” Iran’s oil minister, Bijan Namdar Zanganeh was quoted by Reuters as saying.
If the news proves true, which is highly likely, it will be the first major deal that has come to an end in Iran due to the US sanctions against the country. Although, total isn't the first global firm to withdraw from Iran since the sanction were confirmed and are being phased in.
There is still some time for some countries and industries to seek exemptions to the sanctions. However, that time will come to an end between 90 and 180 from August, when they were confirmed and put in place.
No real surprise
The news that Total has pulled out from its Iran deal won’t come as a huge surprise. The French oil firm said previously that while it would seek an exemption to continue with the project, if it failed to secure one it would consider pulling out and cutting ties with the country.
However, while the withdrawal of Total is a major blow to Iran, there are reports that China’s CNPC could take expand its stake in the project, from the current 30% to a little over 80