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French Energy Giant Total Returns to Iran

As the various countries involved in the 2015 nuclear agreement with Iran meet regarding implementation of the deal. This scheduled meeting is going to be where Iran and Russia call the United States onto the carpet for what they have said is the lack of the U.S. to meet its obligations under the agreement.

One of the aspects of the agreement was the lifting of sanctions on Iran, allowing them to start working with foreign companies to invest in the Iranian infrastructure. Total, a French energy company, signed a multi-billion-dollar contract to develop an Iranian offshore gas field in the largest foreign deal. The deal was originally going to be signed in early 2017, but Total held off due to various political factors.

The latest change in the U.S. administration gave many foreign companies pause before they invested in Iran. There was concern that Trump’s administration was going to reinstate sanctions, due to Trump’s threats to tear up the landmark accord that came into force in January 2016, which also eased sanctions against Iran related to the general economy.

The Trump administration has continued to take a tough line with Iran, imposing fresh sanctions related to its ballistic missile activity and calling for the other Gulf and Arabic nations to unite against Iran during his visit to the Middle East last month. But at the same time, the White House has kept the JCPOA alive by continuing to waive the relevant sanctions every few months as required.

Currently, there is another 90-day review in progress on whether to stick with the nuclear deal, although any move to abandon it will be strongly opposed by the other countries involved in the deal, including Russia.

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Total boss Patrick Pouyanne

“We’re the first Western major to return to Iran. We’re very happy,” said Total CEO Patrick Pouyanne, during an interview when the initial deal was signed in November. Preliminary agreements were also signed in December with Shell and Russia’s Gazprom to develop oil and gas projects.

The first stage of the deal includes the South Pars gas field, giving them a 50.1% stake in the $4.8 billion project. China National Petroleum Corporation (CNPC) will own 30% and Iran’s Petropars 19.9%.

“The international agreement for the development of phase 11 of South Pars will be signed on Monday in the presence of the oil ministry and managers of Total, the Chinese company CNPC and Iranian company Petropars,” a ministry spokesman told the AFP news agency.

Such deals have their own share of controversy in Iran, where the memories of exploitation by foreign firms remains a sensitive topic. Conservatives within the regime have criticized the move to award tenders to foreign companies, which forced the oil ministry to allow domestic conglomerates to compete. This included the firm run by the Islamic Revolutionary Guard Corps (IRGC).

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