French oil major Total plans to make a final investment decision on a $2 billion gas project in Iran by the summer, but the decision hinges on the renewal of U.S. sanctions waivers, the company’s chief executive said on Thursday.
Total was the first Western energy company to sign a major deal with Tehran since the lifting of international sanctions against Iran. Its project aims to develop South Pars 11, which is part of the world’s largest gas field.
Chief Executive Patrick Pouyanne said South Pars 11 will be among a couple of projects to be approved by the company to start by the summer, if nothing is modified with regards to the sanctions.
“There are two executive orders that are supposed to be renewed before summer,” he said, explaining that the administration of previous U.S. President Barack Obama had signed waivers suspending the sanctions.
“These are supposed to last about 18 months. So President Trump will have to, or not, renew these sanction waivers,” Pouyanne told journalists in Paris.
New U.S. President Donald Trump has said the Iran nuclear deal, which ended a diplomatic standoff between Iran and six world powers over the country’s nuclear policy and opens the way for western investment, was “the worst deal ever negotiated.”
U.S. Secretary of State Rex Tillerson, a former CEO of Total’s rival Exxon Mobil, has called for a full review of the Iran nuclear agreement.
Pouyanne said that based on the nuclear deal that was signed, the U.S. government would have to prove that Iran had breached the agreement, for the new Trump-led administration to decide against renewing the waivers.
“So, either the waivers are renewed and as such, respect the Iran nuclear deal, which will allow us to execute the contract and we’ll do so, or they decide to tear up the Iran nuclear agreement,” Pouyanne said.
“In that case, we’ll not be able to work in Iran.”
He added that there was uncertainty on what the new White House administration would do.
Pouyanne said the decision to go ahead with the gas deal last November was a ‘win-win’ one, and that Total had some guarantees in place that protects the company financially if the project does not go through.