Total signs $2b deal for Iranian gas

Total signs $2b deal for Iranian gas

PARIS (AFP): In an overt challenge to U.S. sanctions threats, the French oil company Total has signed a US$2 billion contract to invest in the exploration of a gas field in Iran, company officials announced Sunday.

Together with the Russian gas giant Gazprom and the Malaysian Petronas company, Total agreed with the National Iranian Oil Company (NIOC) to develop the off-shore gas deposits in the southern Pars field.

Total officials estimated the gas field, 70 meters (230 feet) beneath the sea, to contain eight trillion cubic meters (280 trillion cubic feet) of natural gas.

The United States had expressed its displeasure at Total's negotiations aimed at investing in the gas field and threatened the French firm with sanctions if a deal were struck.

Total -- which holds 40 percent of the shares in the consortium while its two partners have 30 percent each -- will be the temporary operator until the field enters production around 2002, the statement said.

The NIOC will then become the operator and the consortium partners will receive a share in the production of hydrocarbons to cover the repayment of their investment and their costs.

The company said it expected production of gas and condensate to start "in the second half of 2001, with work being completed a year later".