State-owned China National Petroleum Corporation (CNPC) has replaced France's Total in the multi-billion dollar gas exploration project in South Pars, the office of the Iranian Oil Ministry confirmed on Sunday.
As quoted by Reuters, Iranian Oil Minister Bijan Zanganeh announced via the semi-official news agency of Iran, ICANA, that China's CNPC has already officially taken over the slot currently vacated by Total in phase 11 of South Pars.
No additional details were given except that the work will soon start as soon as negotiations with the Chinese firm are wrapped up.
The French oil company held more than half of the ownership stake in the project. It is believed that the shares will be duly turned over to CNPC as soon as contracts and agreements were already signed.
The French Withdrawal
As previously reported here in Business Times, the major French oil players announced in August that it will be cutting off ties with the Iranian government and on its giant energy undertaking.
One of the apparent reasons behind the withdrawal then was the looming economic sanctions placed by Washington on Tehran.
This would be the second wave of Trump's sanction on the embattled country, the first of which was implemented months prior.
A report from France 24 on August meanwhile said that Total's move to retract from the oil deal won't affect the company's crude production and that it will continue to push through its plans to increase output by 5 percent per year.
However, market analysts said then that despite the lack of major repercussions, Total's bailing out could affect the firm's prestige.
The total has already invested 40 million Euros in the project.
South Pars happens to hold the 7.5 percent of the total gas reserves of the world. This roughly translates to nearly 40 percent of Iran's economic wealth once the project gains steam.
Partnership With China
China's replacement was a perfect timing given that the country's oil demands have since grown in the past few years.
Moreover, China's connection with Iran comes as a direct blow to Trump's incessant call for international oil players to get their hands off Tehran.
Beijing made it clear that despite the pressures from Washington, it will uphold its business with the Islamic country. This is also even with the sanctions placed by the White House on the Gulf nation.
Sanctions on Iran came at the heels of Trump's withdrawal of the 2015 Nuclear Weapons deal wherein the White House accused Tehran of violating the accord.
