Total threatens to 'back out' of South Pars 11 in Iran

Exit raises doubts whether European leaders can keep the Iran nuke deal alive

Exit raises doubts whether European leaders can keep the Iran nuke deal alive

Earlier this month President Donald Trump withdrew the U.S. from the global deal with Iran.

Total signed a contract in 2017 to develop phase 11 of Iran's South Pars gas field, with an initial planned investment of $1bn (£750m).

"Total.will have to unwind all related operations before 4 November 2018 unless Total is granted a specific project waiver by the USA authorities with the support of the French and European authorities", it said.

USA banks are involved in more than 90 percent of Total's financing operations, while US shareholders represent more than 30 percent of its shareholding, according to the company.

TOT says it has spent less than 40M so far on the project and that a withdrawal would not affect its 5% compound annual growth rate target during 2016-22.

For the French company to stay, a project waiver would have to protect the company from "any secondary sanction as per USA legislation", it said.

Following the global agreement three years ago to ease the embargo against Iran, companies began exploring trade and investment with the former isolated state.

Washington is re-imposing strict sanctions on Iran, which were lifted under the 2015 deal to curb the country's nuclear ambitions. France, Germany and Britain are leading a European effort to safeguard Europe's economic interests but have few options that pose any threat to the United States.

According to Total, US banks are involved in more than 90% of its financing operations.

Total was the furthest advanced of its European oil major peers in a cautious feeling out of upstream opportunities in Iran since the easing of worldwide sanctions at the start of 2016.

"We have a situation where there is a will to impose sanctions on Europeans and a resentment towards European companies who are now being accused of supporting a terrorist state".

When the Iran agreement was signed and sanctions were ended, Total was among the first corporations to sign business agreements with the Iranian government. Joe Kaesar, the CEO of Germany's Siemens, told CNN his company would not be able to do any new business with Tehran.

Total said it will unwind operations by November unless sanctions are waived.

Trump's decision to withdraw from the 2015 nuclear deal with Iran risks exposing European countries that have since invested in Iran to renewed United States sanctions, after "wind-down" periods of three to six months expire.

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