French energy giant Total joined other major European companies in saying they will exit Iran unless us sanctions are waived, casting a shadow over efforts by European leaders to salvage the Iran nuclear deal.
"It would be suicide to do any new business or funding for Iran or Iran-related companies without explicit guarantees from the USA government".
Total issued a statement on Wednesday on the future of its oil projects in Iran stating that the decision came after President Donald Trump's announcement to withdraw from the JCPOA.
Since the July 2015 nuclear accord, Total, together with its project partners, has been carrying on tendering for subcontracts and other preparatory work to develop the eleventh phase of the South Pars development, which would supply the domestic market in Iran.
Supporters of the deal, which lifted earlier sanctions on the Islamic Republic in exchange for it curbing its nuclear ambitions, need to find a way to reassure companies that their investments are beyond Washington's extra-territorial reach.
NIOC has in the past stated that it would not compensate Total for any investment it has made in the project thus far. It most recently imposed such stiff penalties on China's ZTE technology giant that the firm has said it will be forced to go out of business unless it gets a reprieve.
As a outcome, "Total will not be in a position to continue the SP11 project and will have to unwind all related operations before 4 November 2018 unless Total is granted a specific project waiver by the USA authorities with the support of the French and European authorities", the French company said in a statement.
According to Total, US banks are involved in more than 90% of its financing operations.
The United States imposed sanctions on Tuesday on Iran's central bank governor, three other individuals, and an Iraqi-based bank as Washington seeks to cut off funding it says Tehran is using to fund militant activities overseas.More news: Government to take control of East Coast Main Line from Stagecoach Group
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Managing Director of Pergas International Consortium Colin Rowley, and Bijan Alipour, managing director of National Iranian South Oil Co., signed a preliminary deed on the partnership in the presence of British Ambassador Rob Macaire in Tehran on Wednesday night.
Another Danish oil tanker operator Torm has said it would stop taking new orders in Iran. They could not afford to be sanctioned by remaining in Iran.
Trump's decision to abandon the 2015 nuclear accord risks exposing European countries that have since invested in Iran to renewed United States sanctions, after "wind-down" periods of three to six months expire.
But the reach of the USA financial system, the dominance of the dollar and the presence of European companies' operations in the United States all weaken any potential EU measures.
Major European countries share Trump's concerns but argue that the nuclear deal is the best way to stop the increasingly influential regional power from obtaining an atomic weapon.
But Mogherini said the European Union would make every effort to maintain business ties with Tehran and ensure that Tehran can continue to sell its oil around the world. "Oil companies are not going to be able to invest in the upstream sector, traders and purchasers of Iranian crude are going to have to find other sources, or seek an exemption from the USA government to be able to continue buying".
Germany, France and the United Kingdom have vowed to stick with the nuclear deal and they're talking to Iranian officials about how to protect the economic benefits it offered Tehran.
"The current situation will pass and Iran will emerge as a victor", the oil ministry's news agency SHANA quoted Zanganeh as saying.