Iran has signed an agreement with a British consortium to develop an oil field, in the first such deal with a Western firm since Washington announced it would exit the nuclear deal and reimpose sanctions on Iran.
The National Iranian South Oil Company signed an agreement with the London-based Pergas consortium to produce 655 million barrels of oil from the Keranj field in southwestern Iran in the next 10 years, Iran's Oil Ministry said on May 17 through its Shana news service.
The Pergas deal came within hours of an announcement by French energy giant Total that it will abandon a major natural gas project in Iran unless it can obtain a waiver from U.S. sanctions that are due to go into effect in November.
The Pergas deal was signed in Tehran in the presence of the British ambassador late on May 16, but it was not clear whether it has received approval in London.
"We hope that the U.K. government...endorses the agreement," Iranian Oil Minister Bijan Namadar Zanganeh was quoted as saying by Shana.
Zanganeh added that he expects European countries to make up for what he called the U.S. "betrayal" of the nuclear deal and show the support they have pledged to give Western companies that sign deals with Tehran.
The $1 billion Pergas project would use advanced technology and processes to increase production over the next decade from the aging Karanj field to 200,000 barrels of crude oil a day from 120,000 barrels currently.
The U.S. sanctions are aimed at prohibiting U.S. and foreign companies from doing business with Iran by, among other things, barring them from using the U.S. dollar or U.S. financial institutions.
Total had cited a risk to its operations in the United States from the sanctions in announcing that it plans to exit Iran, but analysts said Pergas conducts comparatively little business in the United States, giving it more freedom to operate in Iran undeterred by the sanctions.
Total had been the first Western company to resume business in Iran after sanctions were lifted in 2016 in exchange for curbs on Iran's nuclear activities under its 2015 nuclear deal with world powers.
French President Emmanuel Macron said on May 17 that while European leaders are doing everything they can to preserve the nuclear deal and protect European businesses operating in Iran, they cannot force companies to stay there.
"What I want to do is to be able to provide all guarantees for all the businesses that would like to stay in Iran to be able to do so," he said. "But we're not going to impose French businesses to stay in Iran. The president of the French Republic is not the CEO of Total!"
Macron said the U.S. decision to exit the deal would benefit Russian and Chinese companies doing business with Iran at the expense of Western firms.
Zanganeh said Tehran will make every effort to maintain its oil production and exports at current levels near 4 million barrels a day and predicted it would overcome the difficulties resulting from U.S. abandonment of the nuclear deal.
"The current situation will pass and Iran will emerge as a winner," Shana quoted him as saying.