SHARE
COPY LINK

US

French energy giant Total ‘officially quits Iran’ over US sanctions risk

French energy giant Total has officially quit its multi-billion-dollar gas project in Iran, Oil Minister Bijan Namdar Zanganeh said on Monday, following the reimposition of US sanctions.

French energy giant Total 'officially quits Iran' over US sanctions risk
Photo: AFP
“Total has officially left the agreement for the development of phase 11 of South Pars (gas field). It has been more than two months that it announced that it would leave the contract,” he told parliament's news agency ICANA.
   
Zanganeh also appeared before parliament to underline the dire state of Iran's oil and gas facilities, which he said were “worn out” and in need of renovation that Iran could not afford. 
 
The United States said in May that it was abandoning the 2015 nuclear deal and reimposing sanctions on Iran in two phases in August and November. 
   
The second phase will target Iran's oil industry.
 
Photo: AFP
   
The other parties to the nuclear deal — Britain, France, Germany, China and Russia — have vowed to stay in the accord but their companies risk huge penalties if they keep doing business in Iran.
   
Total had already said it would be impossible to remain in Iran unless it received a specific waiver from Washington, which was not granted. 
   
Total signed up in July 2017 for the $4.8 billion (4.1 billion euro) project to develop the field off Iran's southern coast, as the lead partner alongside the China National Petroleum Corporation (CNPC) and Iran's Petropars. 
   
It was due to make an initial $1 billion investment, but the company said in May that it had spent less than 40 million euros on the project to date, as uncertainty over US actions mounted. 
   
Total would have been highly vulnerable to US penalties for remaining in Iran.
   
The company has $10 billion of capital employed in its US assets, and US banks are involved in 90 percent of its financing operations, Total said in May. 
   
It remains unclear whether CNPC will take over Total's stake in the project. 
   
Iran remains wary of relying on Chinese firms after bad experiences in the past. A previous contract for CNPC to develop the field at South Pars was suspended in 2011 after it failed to make progress.
   
The urgent need for investment to upgrade Iran's dilapidated energy infrastructure was a key motivator behind its decision to join the 2015 nuclear deal. 
   
Zanganeh appeared in parliament on Monday to answer questions on safety concerns following a number of recent fires at refineries. 
   
“A big part of the oil industry has been worn out and the necessary renovation has not taken place,” he told parliament, according to the official IRNA news agency. 
   
He said there were 10 cases per day of tubes perforating in Iran's southern facilities, and that some refineries were as much as 80 years old, “whereas the useful life of an industrial unit is 30 years”. 
   
“We have no resources for renovating them,” he added.
 
READ ALSO:

 French car giants Peugeot and Citroen to exit Iran over US sanction risk

Photo: AFP

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

US

Trump orders investigation into France’s planned tax on tech giants

US President Donald Trump has ordered an investigation into France's planned tax on internet services that will hit American tech giants especially hard, officials said Wednesday.

Trump orders investigation into France's planned tax on tech giants
Photo: AFP
The investigation into unfair trade practices could pave the way for Washington to impose punitive tariffs, something Trump has done repeatedly since taking office.
   
“The United States is very concerned that the digital services tax which is expected to pass the French Senate tomorrow unfairly targets American companies,” US Trade Representative Robert Lighthizer said in a statement.
   
The proposed three percent tax on total annual revenues of companies providing services to French consumers only applies to the largest tech companies, “where US firms are global leaders,” the trade representative's office said.
 
READ ALSO:

France to introduce tax on big US tech firms in JanuaryPhoto: AFP

The so-called Section 301 investigation is the primary tool the Trump administration has used in the trade war with China to justify tariffs against what the United States says are unfair trade practices.   

USTR will hold hearings to allow for public comment on the issue over several weeks before issuing a final report with a recommendation on what actions to take.
   
Despite the objections to the French tax proposal however, the statement said the United States will continue to work with other advanced economies to address the conundrum of how to tax tech companies.
   
The Group of 20 has tasked the Organization for Economic Cooperation and Development with finding a fix in the international tax system that has allowed some internet heavyweights to take advantage of low-tax jurisdictions in places like Ireland and pay next to nothing in other countries where they make huge profits.
   
The Computer & Communications Industry Association on Wednesday applauded the US Trade Representative's move, saying the tax would retroactively require US internet giants operating in France to turn over a percentage of their revenues from the beginning of this year and violates international trade commitments.
   
“This is a critical step toward preventing protectionist taxes on global trade,” CCIA official Matt Schruers said in a statement.
   
“CCIA encourages France to lead the effort toward more ambitious global tax reform, instead of the discriminatory national tax measures that harm global trade.”
SHOW COMMENTS