What Happened: French oil and energy company Total announced that it may withdraw from the Iran South Pars 11 (SP11) energy project, following U.S. President Donald Trump's decision to pull out of the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action, Reuters reported May 16.
TOT "will not be in a position to continue the SP11 project and will have to unwind all related operations" before November 4 unless it receives a waiver from the US protecting it from sanctions.
The announcement shows how European companies are starting to take matters into their own hands as their leaders struggle to save an global nuclear deal with Iran after the United States withdrew and said it would reinstate sanctions on Tehran.
French energy firm Total on Wednesday said it might not be able to continue its gas development project in Iran, unless it gets a waiver from the U.S.to protect it from reimposed sanctions.
Siemens CEO Joe Kaeser told CNN this week that Trump's decision meant his company could not do any new business in Iran.
According to Total, US banks are involved in more than 90% of its financing operations.
"This project waiver should include protection of the company from any secondary sanction as per USA legislation".
The Phase 11 contract will automatically go to Total's consortium partner China National Petroleum Corporation (CNPC) and local player Petropars if the French player does pull out, Iranian officials have previously said.
The company also confirmed its 5%/year average production growth target between 2016 and 2022, noting "various growth opportunities which have been captured by Total in recent months."Total also said its actual investment to date with respect to the south Pars contract is less than Eur40 million".
Other European companies including Volkswagen and Airbus have forged business ties with Iran since the breakthrough 2015 deal was signed. France, Germany and Britain are leading a European effort to safeguard Europe's economic interests but have few options that pose any threat to the United States.
"We have a situation where there is a will to impose sanctions on Europeans and a resentment towards European companies who are now being accused of supporting a terrorist state". Russian Federation has also said it remains committed to the deal. "With that in mind it's a logical decision", a European diplomat said of Total's decision.