Total CEO echoes oil firms’ risks in Iran

The nervousness over a potential resumption of hardline policies by the US towards Iran was illustrated by comments to investment analysts made by Total’s chief on Thursday.

The French oil major is one of the few western companies to sign initial deals with Iran to help it rehabilitate its oil and gas industry after years of sanctions. It signed a preliminary deal in November to develop phase 11 of the giant South Pars gasfields off Iran’s south-west coast.

Asked about risks to the companies’ big investment prospects, which includes the Iran deal, Patrick Pouyanné, Total’s chief executive, said: “The main risk of course is South Pars in Iran,” according to a transcript of the call with analysts.

“The US president and the US secretary of state will have to sign some waivers, renew the waivers, by April and May in order to stay within the scope of the treaty with Iran,” he said, referring to the 2015 treaty that led to a lifting of Iranian oil sanctions last year in exchange for a roll back of its nuclear weapons programme.

“Our own timetable is to finalise the contracts and take the [final investment decision] by the middle of the year,” Mr Pouyanné said. “We want to sanction the project [but] if the US decides not to stick on the treaty then we’ll have to obey the international laws, that’s clear to me.”

His comments underline the lack of clarity so far about the course the new US administration will take.

Mr Trump, when he was still a candidate for his party’s nomination, last spring told the American Israel Public Affairs Committee (AIPAC), a lobbying group, that his “number one priority is to dismantle the disastrous deal with Iran”.

Though his subsequent comments and those of some of his senior cabinet members have shifted back and forth, Mr Trump earlier this month slapped new sanctions on Iran, citing a missile test in January and support for rebels in Yemen.

Iran launched another missile test within days of the new sanctions in defiance of the move.

Most of the oil majors – including BP, Chevron and ExxonMobil [whose former chief executive, Rex Tillerson, is the new secretary of state] – have stayed away from Iran. Total was joined by Royal Dutch Shell, which signed a preliminary deal in December to study work on the Azadegan and Yadavaran oilfields in the south-west, and the offshore Kish gasfield. Ben van Beurden, Shell’s chief, did not comment on Iran when he reported on the company’s outlook last week.

Schlumberger, the world’s largest oil services company, which is technically based in the Netherlands Antilles but headquartered in Houston, also has signed a preliminary deal with Iran but not commented on renewed tensions.