French oil firm Total says it may discontinue project in Iran

French President Emmanuel Macron with British PM Theresa May and German Chancellor Angela Merkel before the EU-Western Balkans Summit in Sofia on Thursday

Europe to exempt its firms from US sanctions on Iran

Despite the US' withdrawal, the European Union said it would remain committed to the deal and would ensure sanctions on Iran remain lifted, as long as Tehran meets its commitments.

Total signed a contract in 2017 to develop phase 11 of Iran's South Pars field with an initial investment of $1 billion, marking the first major Western energy investment in the country after sanctions were lifted in 2016.

In a statement, Total said it "will have to unwind all related operations" before November 4, unless it's granted a specific waiver by USA authorities that would protect it against sanctions.

CNPC has a 30% stake in the venture, with Petropars at 19.9%, leaving Total with an operatorship of 50.1%.

The US decision to withdraw from the nuclear deal between Iran and an alliance of western powers was taken earlier this month, despite opposition from France, Germany and the United Kingdom, and threatens a huge swathe of global business deals.

The nuclear agreement, worked out by the U.S. under former President Barack Obama, together with five other world powers and Iran, lifted sanctions on Iran in exchange for limits on its nuclear programme. The deal also restarted foreign trade and investment flows into Iran.

France, Britain and Germany had vowed earlier this week to keep the 2015 nuclear deal alive by trying to keep Iran's oil and investment flowing, but admitted they would struggle to provide the guarantees Tehran seeks.

But big European companies simply aren't willing to take the risk of continuing to invest and operate in Iran.

Companies caught violating sanctions could be cut off from the United States financial system and targeted with a range of other punishments.

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.

"Total has always been clear that it can not afford to be exposed to any secondary sanction which might include the loss of financing in dollars by U.S. banks for its worldwide operations", the group said.

Total's prospects of securing a waiver that would allow it to continue with the South Pars deal look slim. A waiver seems "very unlikely", he added.

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.

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