Total Officially Quits South Pars, CNPC May Take Over

French energy giant Total has officially quit its $5 billion natural gas project in South Pars, Iran’s Oil Minister Bijan Namdar Zanganeh said on Monday, "Total has officially left the agreement for the development of phase 11 of South Pars (gas field). It has been more than two months that it announced that it would leave the contract", following the reimposition of the first phase of U.S. sanctions.

Washington imposed new sanctions on Iran in August, targeting its trade in gold and other precious metals, purchases of US dollars and its car industry. The European powers, China and Russia say they will do more to encourage their businesses to remain engaged with Iran. But the threat of US sanctions has prompted many major companies to pull out of Iran, such as Maersk, Peugeot, Daimler, etc.

To remind, Total operates South Pars Phase 11 project with a 50.1% stake, is partnered by China's CNPC (30%) and Iran's Petropars (19.9%). With the retreat of Total, CNPC is believed with high probability to take over all Total’s stake as inked in agreement and become the controller of the world’s largest natural gas reserves ever proved. However, CNPC remains silent officially on this matter.