Total halts $2 billion gas project in Iran

Exit raises doubts whether European leaders can keep the Iran nuke deal alive

Total said it could not afford to breach the looming USA sanctions against Iran due to its reliance on American banks and shareholders.

French energy firm Total on Wednesday said it might not be able to continue its gas development project in Iran, unless it gets a waiver from the U.S.to protect it from reimposed sanctions.

The total project, which also involves China 's CNPC and Iranian company Petropars, is estimated to be around $2 billion for the first phase.

"On 8 May 2018, President Donald Trump announced the United States' decision to withdraw from the JCPOA (nuclear agreement) and to reinstate the U.S. sanctions that were in force before the JCPOA's implementation, subject to certain wind down periods", Total said in a statement.

The deal - championed by former President Barack Obama - was created to limit Iran's nuclear program in exchange for lifting some sanctions, allowing Iran to boost oil exports.

Italy's Eni, which last June signed a provisional agreement with Tehran to conduct oil and gas feasibility studies, said after Washington's decision to quit the nuclear deal last week that it had no plans for new projects in Iran.

In announcing his withdrawal from the deal, Trump warned companies that they face sanctions if they do business with Iran.

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Companies caught violating sanctions could be cut off from the USA financial system and targeted with a range of other punishments.

The group mentioned it has $10 billion of capital employed in its USA belongings, and U.S. banks are concerned in 90 % of its financing operations, making Complete extremely weak if focused by any United States actions.

For the French company to stay, a project waiver would have to protect the company from "any secondary sanction as per USA legislation", it said. It also has significant operations and a large number of shareholders in the United States.

Total holds a 50.1 percent stake in the South Pars project.

Jason Tuvey, a Middle East economist at Capital Economics noted that Trump had granted some countries exemptions from global steel and aluminum tariffs. A waiver seems "very unlikely", he added.

The French state-backed oil group said that without an exemption from the U.S. it would halt work at the world's largest gas field and wind down all its activities by November 4. The gas was supposed to start flowing into the Iranian market in 2021.

Companies are starting to take matters into their own hands as European and some other governments struggle to save the Iran deal.

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