ISTANBUL - TDN with wire dispatches
The head of French energy giant Total said in an interview published yesterday that it is too politically risky to invest in Iran, dealing a serious blow to the Islamic republic's key energy sector. In a response to Total's comment, Tehran regime said that it would go ahead with a gas field development with or without the French firm.
However chief executive Christophe de Margerie's remarks virtually cripple Tehran's hopes of boosting its gas exports because Total is the last major western energy group considering a big investment.
"Today we would be taking too much political risk to invest in Iran because people will say: 'Total will do anything for money,'" de Margerie told the Financial Times newspaper, as reported by Reuters.
Total was to develop phase 11 of Iran's giant South Pars gas field to produce liquefied natural gas (LNG) alongside Malaysia's Petronas. Iran has vast untapped gas reserves and wants to develop the sector for export.
The news came amid escalating tensions between world powers, led by the United States, and Tehran.
�Death' blow, US victory:
Total is one of the few companies in the world thought to have the technology to exploit Iran's gas reserves -- the biggest in the world after Russia's -- and the news is likely to come as a serious blow to Tehran.
It is now unlikely to be able to boost its gas exports significantly until late next decade at the earliest, the Financial Times said.
Samuel Ciszuk, a Middle East energy analyst at economic analysts Global Insight, told the paper the news was "a death blow" for Iran's ambitions over liquefied natural gas.
The Financial Times described the news as a "victory for U.S. efforts to isolate Tehran" and said Total had been left exposed by Royal Dutch Shell and Repsol YPF's announcement in May that they would pull out of phase 13 of work in the field, the biggest in the world.
South Pars is shared between Iran and Qatar but exploitation on the Iranian side has been slow by comparison with the work done by Qatar.
De Margerie also reportedly voiced frustration over tight scrutiny of investments in the Iranian energy sector, saying: "You take the two major countries (Iran and Iraq) out of the system and then you say: 'There is not enough oil and gas.' Oh no, surprise, surprise."
Washington had reportedly been particularly worried about the possible impact of a major Total investment in Iran.
Iran warned in September it was prepared to go ahead with a major gas project using Iranian firms alone if Total did not swiftly implement the deal.
Meanwhile Iranian Oil Minister Gholamhossein Nozari said yesterday Iran would go ahead with a gas field development with or without Total after the French firm said it would not invest because of political risks.
"This is our message. We will proceed with development with or without them," Nozari told reporters when asked about a Financial Times report that Total was withdrawing from Iran's South Pars project, according to Agence France-Presse.
The chief executive of French energy group Total, Christophe de Margerie, told the FT in a interview published yesterday that his firm would not invest in Iran because the political risk was too high.
"Today we would be taking too much political risk to invest in Iran because people will say: 'Total will do anything for money'," the FT quoted Margerie as saying.
Total has a memorandum of understanding with state-owned National Iranian Oil Company to develop Phase 11 of the South Pars field. The firm previously said it had a long-term interest in the project but saw short-term difficulties reaching a deal.
Iran had said it wanted Total to commit to the deal by mid-year but the French government, concerned about Iran's nuclear program, had urged Total not to invest.
In May, rival Royal Dutch Shell said it would pull out of developing another phase of the South Pars project.