Oil and gas major Total has threatened to pull out of the South Pars 11 (SP11) gas development project in Iran in the wake of impending US sanctions on the Middle-Eastern nation.
The SP11 project is aimed at supplying domestic gas to the Iranian market and the French firm signed a contract to develop it with an initial investment of $1bn.
The latest announcement made by Total is in response to the decision taken by the US President Donald Trump to withdraw from the 2015 nuclear deal reached with Iran.
Trump is also set to renew sanctions on Iran and the impending action is a worrying sign for global companies having business interests in the country.
Total has stated that unless the US, along with French and European authorities, does not grant a specific waiver for SP11, it will not continue with the project.
The company noted it will unwind all project related operations before 4 November this year unless sanctions are revoked.
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In a statement, Total said: “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 US banks for its worldwide operations, the loss of its US shareholders or the inability to continue its US operations.”
The company is currently engaged in negotiations with the French and US authorities to examine the possibility of a project waiver.
Until now, Total’s spending on the SP11 project is less than €40m in group share.