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Project Based Waiver From Iran Sanctions From Trump Sought By French Oil Giant Total

Project Based Waiver From Iran Sanctions From Trump Sought By French Oil Giant Total
Demanding a waiver from the sanctions on Iran that United States President Donald Trump reimposed last week, a threat of pulling out of a $2 billion natural gas project in Iran was issued on Wednesday by the French oil giant Total.
The company is seeking protection from indirect impacts of a U.S. sanction on Iran and was looking for help form the French government top get “a specific project waiver” from the Trump administration.
About $2 billion was agreed to be spent by Total in a 20-year contract with Iran signed in 2017 under which the French company would make the investment at the South Pars field which is an offshore area that is shared between Iran and Qatar. Construction of production platforms and subsea pipelines and drilling were the activities that Total is supposed to engage in at the oil field.
However, the company’s plans got a jolt after the pulling out of Trump from the Iran nuclear accord earlier in the month and the rising possibility of reimposition of economic sanctions by the U.S. on Iran which would not only be applicable to U.S. companies but also to other companies that have business interest in Iran through “secondary sanctions”. Such sanctions would prevent foreign companies having Iranian ties dealing in the U.S dollar and hamper business in the U.S> market and for Total hat market is far greater than the business interests in Iran.
“Total has always been clear that it cannot afford to be exposed to any secondary sanction, which might include the loss of financing in dollars by U.S. banks for its worldwide operations,” the company said in a statement on its website.
About 90 percent of Total’s financing is provided by U.S. banks, the company said. and over 30 percent of Total’s shareholders is comprised of American investors, the company also noted. Additionally, over $10 billion in U.S. assets have bene invested by Total; in the U.S.
The move by Total to request for a project-based waiver form the Trump administration was described as a “brave” push for leniency, said Elizabeth Rosenberg, a senior fellow at the Center for a New American Security and former Treasury official.
“This is about as aggressive as any publicly traded company could be in demonstrating support for Iran,” she said. “Total has quite a flair for diplomacy. I took it as being a forward-leaning statement that it is interested in pursuing its project.”
So far less than $48 million has been spent on the project by Total. The production growth targets through 2022 of Total would not be impacted by pulling out of Iran, the company said.

Christopher J. Mitchell

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