De Margerie’s statement deals heavy blow to Iran’s hopes of boosting its key
LONDON – The head of French energy giant Total said in an interview
published Thursday that it is too politically risky to invest in Iran,
dealing a serious blow to the Islamic republic’s key energy sector.
Chief executive Christophe de Margerie’s comments 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.
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.
On Wednesday, Iran test-fired a Shahab-3 missile which it said is capable of
reaching Israel and continued missile tests Thursday, fuelling fears of a
conflict over its disputed nuclear programme and triggering a rise in oil
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 US 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
Wednesday’s missile test was condemned by the US, although US Defence
Secretary Robert Gates played down the risks of a conflict between his
country and Iran.
The UN Security Council has imposed several rounds of sanctions on Iran for
not suspending its uranium enrichment activities, which world powers fear
could be used to make a nuclear weapon.
Tehran insists the programme is for civilian energy purposes.