Patrick Pouyanne, the chief executive officer of Total SA said last week the French energy major is not worried about its gas deal with Iran amid reports that Total has resumed operations in Iran’s South Pars Gas Field megaproject.
“The project is not jeopardised. Total respects international laws. If there is a change in the deal that was signed, we will be obliged to obey, but as of today, we are moving ahead.” Pouyanne said, Reuters reported.
A senior official at Iran’s oil ministry also said last week that Total has officially started the development of South Pars Phase 11 in the Persian Gulf, effectively resuming operations in an Iranian energy project after a seven-year hiatus.
“Total has begun work on South Pars Phase 11,” said Gholamreza Manouchehri, the deputy for development and engineering at the National Iranian Oil Company, IRNA reported last week.
The supermajor sealed a preliminary agreement in November, worth $4.8bn, to develop Phase 11 of the South Pars at the head of a consortium that includes China National Petroleum Corporation (CNPC) and Petropars, a subsidiary of the NIOC.
Phase 11 is deemed as one of the least developed of the South Pars field that is shared between Iran and Qatar. Based on the agreement, production is expected to begin 40 months after the start of operations.
Total was active in developing Iranian energy projects for more than 20 years, including in South Pars. But it ceased operations in 2010 following disagreements over contract terms as well as pressure from the French and US governments over oil and trade sanctions against Tehran.
Based on the agreement, Total has a majority stake of 50.1% in the project. CNPC and Petropars hold a 30% and 19.9% share respectively. Petropars has played a role in developing South Pars phases 4-8, Phase 12 as well as Phase 19, according to the company’s website.
Total has pledged to lift gas output from Phase 11 to more than 50mn cubic meters per day in 20 years, Manouchehri added.
According to a statement on Total’s website, the Phase 11 project will be developed in two parts. The first, with an estimated total cost of $2bn, will consist of 30 wells and two well head platforms connected to existing onshore treatment facilities by two subsea pipelines.
The second part, involving the construction of offshore compression facilities, will be launched subject to reservoir conditions.
The latest published data show that Iran is now drawing more than 500 mcm/d of gas from South Pars.
The volume is expected to reach 550 mcm/d by March when the present fiscal year ends, and close in on the 700 mcm/d-mark by March 2018 — the volume that Qatar is reportedly pumping from the shared field.
South Pars is the world’s largest gas field, shared between Iran and Qatar, covering an area of 3,700 square kilometers of Iran’s territorial waters in the Persian Gulf. The megaproject is being developed in 24 phases.
The field is estimated to contain 14tn cubic meters of gas and 18bn barrels of gas condensate. It adjoins Qatar’s North Field, which measures 6,000 square kilometers.
Manouchehri says Total is keen to expand its footprint in Iran’s emerging petroleum industry.
“We are discussing upstream projects and production of oil and gas equipment as well as drilling and offshore services,” said the NIOC deputy. “Collaboration between Iranian and French companies will lead to boosting the pace and quality of drilling operations and manufacturing of equipment.”
The latest round of talks with Total was reportedly held during the visit of French foreign minister Jean-Marc Ayrault to Tehran who headed a 60-member delegation of French executives and officials.
Marzieh Shahdaei, managing director of the National Petrochemical Company, said that NPC and Total’s senior executives discussed a petrochemical project last week for production of ethylene and polyethylene.
“Negotiations are expected to result in signing an agreement soon,” she said without providing details.
