France’s Total on verge of deal to develop Iran oil, gas field

The head of French oil and gas company Total said on Monday that his firm would be happy to be the first Western oil company to reach an agreement with Iran, but he said a deal had not yet been signed.

"Discussions are going on and we'll see if we can sign in the coming days," Patrick Pouyanne told CNN Money on the sidelines of an Abu Dhabi petroleum conference. "I would be happy to be the first Western company to sign an agreement with Iran."

Total, which has a long history in Iran, said a deal could happen within days. And a source at the Iranian energy ministry said a document setting out the key terms of a proposed agreement would be signed Tuesday in Tehran.

Asked about the estimated $6-billion value of the potential deal, Pouyanne said, "Developing a phase of South Pars (gas field) is more in the range of $2 billion dollars than $6 billion."

Iran's SHANA news agency said on Monday that Total and China National Petroleum Corp (CNPC) would sign new contracts on Tuesday with National Iranian Oil Company (NIOC) on the second phase of the South Pars gas field.

Total has had a previous involvement in South Pars, one of the largest natural gas deposits in the world, which is located in the middle of the Persian Gulf. In 1997, Iranian authorities awarded the development of phases 2 & 3 of the field to a Total subsidiary.

"We developed some phases of South Pars in the past," Pouyanne told CNN Money. "We were on the verge of sanctioning a project in 2010 just before the sanctions," he said, referring to sanctions imposed on Iran over its nuclear programme.

"Naturally we have engaged discussions with Iran on this topic. So, let see if we can conclude a satisfactory deal for all the parties," Pouyanne said, adding that he would not be travelling to Tehran himself.

The lifting of sanctions in January has allowed Iran to pump up its oil output. So far this year, it has increased oil production by about 900,000 barrels per day to 3.7 million.

Its immediate aim is to produce four million barrels per day and it has clear potential to become a much bigger player. The country sits on 9 per cent of the world's proven oil reserve and claims nearly a fifth of the planet's natural gas.