French oil and energy company Total said on Wednesday that may pull out of the Iran South Pars 11 energy project, in light of a decision by US President Donald Trump to withdraw from an global nuclear deal with Iran.
Germany, France and the United Kingdom have vowed to stick with the nuclear deal and they're talking to Iranian officials about how to protect the economic benefits it offered Tehran.
However earlier this month, President Donald Trump introduced his withdrawal from the deal, and warned firms that they face sanctions in the event that they do enterprise with Iran.
The French oil major was among the first big western companies to return to Iran after the country emerged from years of isolation linked with its nuclear programme.More news: Realme 1 launched in India with 6GB RAM for 13990 rupees
As a outcome, "Complete is not going to be able to proceed the SP11 challenge and should unwind all related operations earlier than four November 2018 except Complete is granted a selected challenge waiver by the United States authorities with the assist of the French and European authorities", the French firm mentioned in a press release.
Total's announcement comes after German insurer Allianz and Danish oil product tanker operator Maersk Tankers said they were winding down their businesses in Iran.
Total said any waiver would need to include protection from secondary sanctions that Washington might impose on companies that continue to do business with Iran. Joe Kaesar, the CEO of Germany's Siemens, told CNN his company would not be able to do any new business with Tehran. The deal also restarted foreign trade and investment flows into Iran. But the reach of the USA financial system, the dominance of the dollar and the presence of European companies' operations in the United States all weaken any potential EU counter-measures.
The oil company said U.S. institutions were involved in 90pc of its financing operations, and make up 30pc of its shareholder base.More news: Kia to launch diesel mild hybrid Sportage SUV later this year
"It would be suicide to do any new business or funding for Iran or Iran-related companies without explicit guarantees from the US government".
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. "With that in mind it's a logical decision", a European diplomat said of Total's decision.
Background: Despite the USA withdrawal, Iranian Foreign Minister Javad Zarif met with European Union leaders on May 15 to discuss how to circumvent US sanctions in an effort to salvage the nuclear deal. Chinese state-owned oil and gas company CNPC holds a 30 percent share and National Iranian Oil Co subsidiary Petropars 19.9 percent.More news: Senators will vote on repealing changes to net neutrality rules