Iran oil minister: French oil giant Total pulls out of Iran

Iran's oil minister said on Monday that France's oil giant Total SA has officially pulled out of Iran after cancelling its $5 billion, 20-year agreement to develop the country's massive South Pars offshore natural gas field over renewed U.S. sanctions.

The parliament's website ICANA.ir quoted Oil Minister Bijan Zanganeh as saying that since Total first announced its decision a while ago, Iran has been in the process of "looking for an alternative" to Total. He didn't elaborate.

There was no immediate comment from TotaI.

Earlier this month, Iran said China's state-owned petroleum corporation took a majority 80 percent share of the project. CNPC originally had some 30 percent of shares in the project.

The renewed U.S. sanctions took effect in August, after America's pullout from the nuclear deal in May. The re-instatement of the sanctions exacerbated a financial crisis in Iran, which has sent its currency, the rial, tumbling.

Total announced in May its decision to cancel the multi-billion-dollar project in Iran because of U.S. sanctions. The group said at the time it couldn't "afford to be exposed to any secondary sanction," including the loss of financing by American banks.

The 2017, $5 billion contract for new development at the massive South Pars offshore natural gas field was the first major gas deal signed with Iran following the 2015 nuclear deal.

Total said in May that its actual spending to date with respect to this contract was less than 40 million euros.

Total had pulled out of Iran already once before, in 2008, as Western sanctions over its nuclear program began to ramp up. The 2015 landmark nuclear deal — which curbed the Iranian nuclear enrichment program in return for the lifting of international sanctions — marked a rush for Western businesses to access Iran's largely untapped market of 80 million people. Most prominently, airplane manufacturers rushed in to replace the country's dangerously dilapidated civilian fleet.

South Pars is the world's largest natural gas filed and is shared by Iran and Qatar, where it's called North Dome. Qatar produces more than 590 million cubic meters per day from the shared field and plans to increase production by 10 percent by 2022.

Iran's total gas production stands at 750 million cubic meters per day, of which 550 million is consumed domestically.

Iran exports gas to neighboring Turkey and Iraq, and pipelines to Pakistan and Oman are in the works. Iran also imports some 12 million cubic meters per day from neighboring Türkmenistan.