Iran signs 1st IPC with France Total

Homayoun Falakshahi, senior research analyst, Middle East and North Africa Upstream, at Wood Mackenzie, said: "The South Pars Phase 11 deal will, Iran hopes, prompt other global oil companies to re-enter the country's upstream sector".

The contract to develop Phase 11 of South Pars gas field in the Persian Gulf would contribute to the development of relations between Europe and Iran, a Total spokesman said.

The China National petroleum Corp. will hold a 30 percent stake.

The agreement was signed on Monday at a ceremony in Tehran attended by Iranian Oil Minister Bijan Namdar Zangeneh.

Iranian President Hassan Rouhani says a multi-billion-dollar gas deal signed between Iran and French energy giant, Total, will facilitate the "transfer of technological, scientific and managerial experience" between Iran and France, PressTV reported. The producer is wooing companies such as Total, Royal Dutch Shell Plc and Russia's Lukoil PJSC to invest in its oil and gas fields to boost output. Upon completion, the field will supply Iran's national grid with 50.9 million cubic meters of gas per day.

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"The South Pars Phase 11 deal will, Iran hopes, prompt other IOCs to re-enter the country's upstream sector".

Energy deals with foreign entities face scrutiny in Iran with conservatives anxious that they will lose market share. Future developments could trigger an LNG export project in Iran, one that has been mooted and postponed multiple times in the last 20 years.

Zamaninia said it was the first deal signed based on the Iran Petroleum Contract (IPC) framework.

According to an official document, prepared by Iran's oil ministry and seen by NGW, the first phase includes construction of two platforms, drilling 30 wells, stretching five pipelines, a fibre cable and a mooring buoy.

The deal comes on the back of a preliminary agreement that was signed in November.

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"The main obstacle is being created by the United States government".

The U.S. Congress has been pushing for a new set of sanctions against Iran and its hard-line Revolutionary Guard, a paramilitary unit responsible for recent ballistic missile tests that angered Washington.

Total said the project will have a capacity of 2 billion cubic feet of natural gas a day or 400,000 barrels of oil equivalent per day, including condensate.

"As well as hard work, this achievement highlights the administration's pragmatic approach to negotiations, particularly within Iran", Wood Mackenzie's analyst added. Total was the first Western company to load an Iranian oil cargo in February 2016 after sanctions lifted.

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