Iran sees strategic gains in Total deal

As Iran is preparing to sign a much-delayed deal with the French energy giant Total over the development of a major gas project, indications are growing that Tehran is already looking at the political messages that the deal could send to the world.

The Persian-language newspaper Jahan-e Eqtesad in a report said the cooperation between Iran and Total over the development of Phase 11 of the country’s huge South Pars gas field would act as “a solid seal of approval” for other international companies that they can also set foot in Iran’s energy projects without fears of any punitive measures. 

Jahan-e Eqtesad added that the deal with Total would specifically help given that it could show a solution had already been found by an international company to get over the sanctions-related banking problems that had so far blamed been for obstructing business with Iran. 

Iran’s Petroleum Minister Bijan Zanganeh said on Saturday that the talks with Total over Phase 11 were already in the final stage and that a deal could be signed within the next few weeks.  

The French major last November signed a basic agreement, worth $4.8 billion to develop the project in cooperation with China’s CNPC and Iran’s Petropars.

The company’s chief Patrick Pouyanné said in April that Total was trying to develop its own mechanism to carry out Iran-related banking transactions without falling afoul of US primary sanctions that still restrict doing financial activities with the Islamic Republic.

Pouyanné added that his company had been sending small amounts of euros from banks in Europe to Tehran to learn how difficult it was to make transactions in Iran.

Wary of running into trouble with the American authorities, larger banks are for now staying away, wrote The New York Times in a report at the time.

“We have identified some, I would say, medium-sized banks that are ready to work with Iran.”

Jahan-e Eqtesad further emphasized that the deal with Total would also provide Iran with long-term political gains specifically in light of Washington’s efforts to impose sanctions against Iran. 

“The presence of Total [in Iran’s energy projects] could also be a sign of a growing rift that has recently emerged between Europe and the US,” the daily added. 

“The Europeans that still strongly remain committed to the nuclear deal with Iran … have recently distanced themselves more from the US,” wrote Jahan-e Eqtesad. A clear indication on the same front, it emphasized, was the disagreement of Europe with Washington over new sanctions against Russia.  

“Once Europe’s interests become more intertwined with Iran’s, such issues [like opposing sanctions against Russia] would benefit the Islamic Republic.” 

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