Franco-Iranian relations appear to have reached a turning point.
The French government reportedly is applying pressure on Total SA and other oil and gas firms to freeze all investments in Iran in an effort to force Teheran into giving up its uranium enrichment program and nuclear ambitions.
The daily Le Monde newspaper reported Sept. 18 that the recommendation falls within the framework of an allegedly tougher political stance toward the Islamic republic by French President Nicolas Sarkozy.
The paper said the chief executive of a French business group acknowledged that the French ambassador to Iran emphasized at a recent meeting that the situation is “not favorable” for business. For example, the executive told Le Monde, the Iranians had put oil and gas exploration blocks out to auction in August, but only Austria’s OMV group had responded.
OMV had signed an agreement in April with Iran’s National Oil Co. (NIOC) for possible investment in developing Iran’s offshore South Pars gas field. But the US has been threatening OMV with retaliatory measures and is trying to deter other Western and Japanese companies from investing in the Iranian hydrocarbons industry.
Total SA is most affected by the changed political atmosphere. The effort to produce and liquefy Pars gas represents seven structural projects that Total wants to develop in 2010-30.
But the firm apparently has little chance of successfully completing them. “The way in which talks with Iran’s national company are progressing does not allow (us) to launch the project for the moment,” a company spokesperson said.
Total General Director Christophe de Margerie favors reviewing the agreements, which are valued at $10 billion, saying in early 2007, “These development costs have more than doubled, and this is a real subject of concern for us.”
Total, which has a 30% stake in the projects, had planned to invest $3 billion there along with NIOC, Malaysia’s Petronas, and a fourth partner.
Gaz de France also is interested in the project and would invest some $300 million, but, according to Le Monde, France’s political instructions are curbing its ambitions as well.
Total has been delaying its decision to invest due to concerns over the rising dangers of the nuclear issue and the change of attitude by the French government.
