London — French energy major Total said it is too early to consider a return to Iran even as negotiations for the US to return to the Iran nuclear deal start to make some progress.
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"We need long-term visibility on the sanctions to start considering coming back to Iran," Total's Chief Financial Officer Jean-Pierre Sbraire said on a call with analysts on April 29. "So honestly, it is not case in the present time."
This comes amid growing efforts to revive the 2015 Joint Comprehensive Plan of Action nuclear deal. Iran is in intensive talks in Vienna with EU, the US and other signatories to the 2015 deal.
"Let's wait for further developments with the new US Biden administration, but what we need is clarity and stability to be in a position to make possible or start considering a possible comeback to Iran," he said. "So it is not on the agenda in the present time. It is far from being the case."
Iranian President Hassan Rouhani recently said the talks in Vienna had progressed by around 60%-70%. A breakthrough in negotiations could see the lifting of US sanctions on Tehran's energy sector, adding more crude to a market whose recovery has been carefully managed by OPEC and its allies.
Positive steps on nuclear talks this week point to an accelerated timeline for sanctions relief, according to S&P Global Platts Analytics.
"Our reference case forecast for a framework deal by the summer and full sanctions relief by Q4 2021 will likely be revised to end-May and end-September, respectively," Platts Analytics said in a recent note.
Total left Iran in August 2018 when it pulled out of the South Pars gas project after the US withdrew from the Iran nuclear deal in May of that year and announced it would reimpose sanctions on Tehran.
The company unsuccessfully sought a US waiver from the sanctions.
US sanctions prohibit any companies from using the US financial system to do business with Iran, a major restriction that affects practically all western firms, due to the dominance of the US dollar in global transactions.
At the time of it leaving Iran, Total said it had invested less than Eur40 million ($48 million) in the $4.8 billion South Pars project, which was scheduled to come online in 2021 with a production capacity of 2 Bcf/d of gas and 70,000 b/d of condensate.
It transferred its 50.1% stake in the project to Chinese company CNPC. A year later CNPC sold its stake to Iranian contractor Petropars, which is the current operator of the project.
Iran has controversially expanded its nuclear program in response to the US withdrawal from the JCPOA and maximum pressure aimed at zeroing the OPEC member's crude trade.
Talks between the US and Iran on sanctions relief could lead to up to 2 million b/d of Iranian crude returning to the market.
The US sanctions have severely hamstrung Iran's crude production, which averaged 2.30 million b/d in March, according to the latest S&P Global Platts survey of OPEC output.
That is down from more than 3.8 million b/d prior to the sanctions being re-imposed in 2018 when the US withdrew from the deal.