French energy firm Total on Wednesday said it might not be able to continue its gas development project in Iran, unless it gets a waiver from the U.S. to protect it from reimposed sanctions.
As a consequence of the U.S. decision to withdraw from the Iran nuclear deal, the company said in a statement that it "will not be in a position to continue" the project, known as the South Pars 11 (SP11).
"Total...will have to unwind all related operations before 4 November 2018 unless Total is granted a specific project waiver by the U.S. authorities with the support of the French and European authorities," it said.
"In these circumstances, Total will not take any further commitment related to the SP11 project and, in accordance with its contractual commitments vis-a-vis the Iranian authorities, is engaging with the French and U.S. authorities to examine the possibility of a project waiver," said the company.
The project waiver should include protection of the Company from any secondary sanction as per U.S. legislation, it added.
The company explained that it could not afford to be exposed to any secondary sanction, which might include the loss of financing in dollars by U.S. banks, the loss of its U.S. shareholders, and the inability to continue its U.S. operations.
U.S. banks are involved in more than 90 percent of Total's financing operations, while U.S. shareholders represent more than 30 percent of its shareholding, according to the company.
The SP11 project is a gas development project dedicated to the supply of domestic gas to the domestic Iranian market, which convened on July 4, 2017.
On May 8, U.S. President Donald Trump announced that the U.S. would withdraw from the Iran nuclear deal and reinstate sanctions that were in force before the implementation of the landmark agreement.
