Total has said it will quit a giant gas project in Iran after American sanctions were reapplied this month.
"Total has always been clear that it can not afford to be exposed to any secondary sanction, which might include the loss of financing in dollars by United States banks for its worldwide operations, the loss of its U.S. shareholders or the inability to continue its USA operations", they said.
The agreement is the first between Iran and a key Western ally of the United States since Washington last week announced it will pull out of the landmark 2015 nuclear deal between Iran and Western powers.
But Total's announcement and similar ones by German insurance giant Allianz and Danish tanker giant Maersk earlier this week illustrate the major obstacles they face trying to overcome renewed US sanctions on Iran. "Total will not continue the SP11 (South Pars 11) project and will have to unwind all related operations before 4 November 2018, unless Total is granted a specific project waiver by US authorities with the support of the French and European authorities", the French oil and gas major said in a statement.
Tehran has repeatedly hailed the Total project as a symbol of the nuclear accord's success at helping to revive and modernize Iran's critical oil and gas industry, which drives the country's economic growth and generates much of the government's revenues.
The announcement shows how European companies are starting to take matters into their own hands as their leaders struggle to save an global nuclear deal with Iran after the United States withdrew and said it would reinstate sanctions on Tehran.
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Total said it would wind down operations linked to the South Pars gas venture before November 4 unless it were granted a specific project waiver by the U.S. authorities, with the support of the French and European authorities.
European Commission head Jean-Claude Juncker was due to present options to protect European investment, which could include retaliatory sanctions, allowing the European Investment Bank to invest in Iran, and coordinating euro-denominated credit lines from European governments. Total does about 30 percent of its business through the U.S. banking system. France, Germany and Britain are leading a European effort to safeguard Europe's economic interests in Iran.
France, Britain and Germany are now in talks with Tehran in a bid to try to salvage the Iran nuclear deal after Washington's withdrawal from the agreement earlier this month. "The EU can't compel or really protect the private sector", Sanam Vakil, associate fellow at Chatham House said of Total's announcement.
Zanganeh said that Total will not face any fine if it withdraws, but the investment it has so far made in the project will not be repaid until full implementation of the project.
Siemens CEO Joe Kaeser told CNN this week that Trump's decision meant his company could not do any new business in Iran.