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Iran signs oil deal with UK group as France's Total exits

AP  |  Tehran 

Iranian state TV is reporting that the country has signed an agreement with a British consortium to develop an oil field, just as another major company, France's Total, says it will withdraw from because of renewed US sanctions.

The new agreement is the first between and a company from a key Western ally of the since last week announced it will pull out of the landmark 2015 nuclear deal between and world powers.

The U.S. said it would reinstate sanctions that were lifted under the deal, which would potentially bar European companies from doing business in both the and Iran. Officials from and signed a preliminary deal on the partnership in the presence of the British in late Wednesday.

The project would entail the investment of $1 billion to produce 200,000 barrels of per day during the next decade in the 55-year-old Karanj oil field, which currently produces 120,000 barrels a day.

The U.S. sanctions aim to limit companies from any country from dealing with Iran by prohibiting them from using American banks in their operations. Pergas seems to do little business in the U.S., potentially giving it more freedom to operate in Iran.

French has decided to cancel a multi-billion-dollar project in Iran unless it is granted a waiver by U.S. authorities. The group said in a statement Wednesday that it "cannot afford to be exposed to any secondary sanction" including the loss of financing by American banks.

wants U.S. and French authorities to examine the possibility of a specific project waiver.

The 2017 contract for new development at the vast South Pars was the first major signed with Iran following the 2015 nuclear deal.

Major European powers and committed this week to keep working together to save the Iran nuclear deal. But made it clear Thursday that will not get into a trade war against the U.S., despite Paris' disapproval of Donald Trump's decision to scrap the nuclear deal.

"We're not going to choose one camp over another. We're not going to be the allies of Iran against the of America", Macron said in a conference in Sofia,

"What I want to do is to be able to provide all guarantees for all the businesses that would like to stay in Iran to be able to do so," he said. "But we're not going to impose French businesses to stay in Iran. The of the French Republic in not the of Total!" Macron said the U.S. decision to exit the deal would benefit Russian and Chinese companies doing business with Iran at the expense of Western firms, but he insisted France's priority is to preserve peace and stability in the region.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, May 17 2018. 22:45 IST
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