Iran has signed a $4.8 billion natural gas development contract with France’s Total and China National Petroleum Corp (CNPC) in its first joint venture with international partners since the sanctions were lifted on Tehran earlier this year. Chinese companies continued investing in Iran whilst sanctions were in place. However, Total is the first Western oil company to re-enter the islamic republic, which has the fourth and second largest oil and natural gas reserves in the world, respectively. Total, CNPC and Iran’s Petropars have agreed to develop Phase 11 of South Pars, the world’s largest gasfield shared between Iran and Qatar, in a contract expected to last for 20 years. The chief executive of Paris-based Total, Patrick Pouyanné, is keen to be involved in new exploration and production projects, having also signed an agreement with Petrobras, the Brazilian oil and gas major last month.
Iran is seeking to attract approximately $200 billion in investment into its oil and gas industry, particularly with the use of its new model petroleum contract allowing foreign companies to participate more actively in development and production. However, analysts say the success of this deal will depend on the outcome of Iran’s elections next spring, when President Hassan Rouhani, who negotiated the nuclear deal, will run against Iranian candidates who are sceptical of international involvement.