Total progresses pretty well in Iran’s South Pars project, CEO says
Tehran (ISNA) - According to Total's
CEO, this company is making significant progress in South Pars gas project in
Iran.
In a major interview given to French
newspaper Le Monde looking at Total’s strong performance in 2017, CEO Patrick
Pouyanné was asked about the “American threat” to the company’s “important gas
project” in Iran. Pouyanné’s forthright response marks perhaps the first time
that a major European executive has publicly called for a diplomatic
intervention to protect commercial interests in Iran.
Total’s CEO explained that the South
Pars project was “progressing well, without delay, and Total continues to work,
even if the situation with the American Congress is rather vague”. He noted
that even if the Americans “decide to exit the nuclear agreement and if
secondary sanctions return in place,” it would pose a “real question” for the
French energy giant.
However, echoing comments made to
reporters on the sidelines of Davos, Pouyanné did not cast snapback as an
automatic game-over for the South Pars project. Rather, he suggested that it
was necessary to “clarify the horizon for European business working in Iran.”
He explains that Total has been in
discussions with French and European authorities about “means to protect
investments already made in Iran, even in the case of the return of sanctions”.
Pouyanné points to the experience of European blocking statutes and sanctions
waivers applied in the 1990s which proved sufficient to protect Total’s gas
projects at the time. Pouyanné concludes by noting that it is “up to European
diplomats to consider these questions.”
The confidence of Pouyanné’s
response stands in stark comparison to the general uncertainty that has gripped
the business community and will be seen as an important signal. The landmark
USD 3.8 billion South Pars project is seen as a bellwether for the larger
project of Iran’s post-sanctions economic recovery.
However, Total is far from the only
major European multinational engaged in the Iranian market. Pouyanne was one of
select group of European CEOs invited to dine with Donald Trump at a special
dinner held during the American President’s trip to the World Economic Forum in
Davos. Other guests included Siemens CEO Joe Kaeser, ABB CEO Ulrich Spiesshofer
and Volvo CEO Martin Lundstedt. Overall, nine of the fifteen companies
represented at the dinner are currently active in Iran, and a further five have
had a historical presence in the market. Pouyanné’s peers are likely to share
his sentiments on the need to protect European interests in Iran and the wider
global economy.
While the legal value of blocking
statutes or sanctions waivers is questionable given the greater
interconnectivity in global markets and greater reticence of the banking sector
to engage Iran when compared to the 1990s, the political message behind such
measures could be valuable, enabling companies to seek creative solutions to
structure their Iran engagements in a way that avoids sanctions exposure.
In a recent survey conducted by
Bourse & Bazaar and commissioned by International Crisis Group, a
substantial 54 percent of senior executives indicated that “assuming Iran
remains committed to the nuclear deal,” blocking statutes, which would protect
companies from U.S. penalties, would positively affect the “decision to invest
in Iran.”
author: D-Ezatiyan - Date: 2/7/2018