Reuters: Total's negotiations with Tehran on a multi-billion dollar contract to develop a major Iranian gas field are at a standstill, the head of the French oil major said on Friday.
By Marie Maitre
AIX-EN-PROVENCE, France, July 3 (Reuters) – Total's negotiations with Tehran on a multi-billion dollar contract to develop a major Iranian gas field are at a standstill, the head of the French oil major said on Friday.
"They (negotiations) have not been broken and they have not been resumed either. They are not in a very advanced state," Chief Executive Christophe de Margerie told journalists on the sidelines of an economic forum in southern France.
Last month, the official Iranian news agency IRNA said Tehran had signed a $4.7 billion contract with China National Petroleum Corporation (CNPC) to develop phase 11 of South Pars, replacing Total which it had accused of delays.
"We are waiting for things to calm down after all the news that came out, incidentally, in the run up to the elections… People have been played off politically against each other," de Margerie said, adding Iran remained a key country for Total.
"Liquefied natural gas is a complicated thing and our Chinese partners are good investors and good candidates but I think, in the nicest possible way, that they don't have the same kind of expertise as we do."
Total has a memorandum of understanding (MOU) with Iran's oil company NIOC to develop Phase 11 but the project was overshadowed by haggling over contract terms.
NIOC has accused Total of delays and said it had given the Paris-based company an ultimatum six months ago to finalise work before Tehran moved forward with another partner.
The South Pars reservoir is shared by Iran and Qatar. The Iranian part is divided into 24 phases.
IRAQ
De Margerie was back from a visit to Iraq with French Prime Minister Francois Fillon on Thursday, two days after a fruitless round of energy auctions in Baghdad as the authorities and many international companies failed to agree on contract terms.
"I discussed with Oil Minister Hussain al-Shahristani. I told him why we could not match (what they were asking for). I think he understood our position," de Margerie said.
"We'll do our best on both sides to find solutions so that Total can participate in the near and medium term development of Iraq's huge resources… Both sides have to probably explain a little bit more … why we do things with a certain return (on investment) depending on the kind of risk we are taking."
Iraq's tender for eight major oil and gas fields was its first energy sale since the 2003 U.S. invasion and the first open run oil firms have had at the world's third largest reserves since Iraq nationalised the industry in 1972.
The auction awarded just one field, to a foreign group led by BP and including CNPC.
De Margerie reiterated that Total had no plans to increase its 1-percent stake in Areva after the French nuclear reactor maker unveiled plans to increase its capital by up to 15 percent and open it to strategic and industrial partners.
"The capital increase will not change our mind," on the issue of increasing Total's stake in Areva, de Margerie said.
Total and Areva are jointly bidding to buld two nuclear reactors in Abu Dhabi. (Reporting by Marie Maitre, editing by Anthony Barker)
