What's Really Behind French Oil Giant's Deal With #Iran?
The $4.8-billion-dollar deal between
Iran and France's Total, the huge multinational oil and gas Company, has
become very controversial. Considering the unilateral U.S. sanctions
and increasing measures against Iran, why has Total risked signing such a
deal?There are a variety of possibilities.Total will be developing
phase 11 of Iran's mammoth South Pars gas field, the largest in the
world,
along with a state Chinese
firm and an Iranian subsidiary. The project is set to render 2 billion
cubic feet of gas per day, equivalent to 400,000 barrels of oil.
Iran's
domestic market will receive the supply in 2021. The first stage is set
to cost $2 billion, with an end price of up to $5 billion and
production forecasted to start within 40 months.
As
we speak, however, Washington continues to impose sanctions on Tehran
and the Trump administration's comprehensive Iran policy has yet to be
defined. Therefore, why did Total accept such a risk?
The
mullahs' regime has provided numerous concessions in this deal, leaving
Total believing the risk is worth taking. Iran may also receive no
compensation in the case of Total deciding to abandon the contract. Ten
years ago a similar contract was signed between Iran and Total, ending
in the French company pulling out and not paying a dime in compensation.
Total
most likely also received guarantees on Tehran paying any possible
financial fines. And finally, considering the silence seen from
Washington over this deal, there lies a possibility of the Americans
providing a green light for its brokering.
Needless
to say, U.S. Treasury Secretary Steven Mnuchin has emphasized that
regardless of the policies adopted by Congress, the Trump administration
will continue its own path of implementing sanctions on Iran.
The
entire contract remains classified and the scenarios discussed above
remain probabilities. What remains completely constant is the enormous
scope of concessions provided by Iran. Rest assured all such actions
were approved by Iranian Supreme Leader Ali Khamenei himself.
This
is exactly why he has remained silent despite all the disagreements and
discussions inside the regime. Iran's parliament has canceled any and
all discussions in this regard. When handling major policy matters,
Khamenei has the final word, similar to how it is said he blessed the
Iran nuclear deal in a mere 20 minutes.
Both
Iranian regime factions need to launch a major brouhaha in this regard.
Members of Khamenei's conservative faction refer to the faults in
slamming the faction loyal to President Hassan Rouhani.
The
Revolutionary Guards (IRGC) is the main party concerned in this regard,
as the Total deal leaves it out of earning any direct revenue. The
Rouhani faction also seeks to boast their success, especially after
gaining nothing from the Iran nuclear deal.
Economically,
this $4.8 billion deal only provides for 2.5 percent of Tehran's
investment needs. In the next five years, Iran will need around $200
billion in investments, according to the Oil Ministry. This deal
provides for the only 1/40th of the amount.
Iran
will drop from an oil exporter to becoming an oil importer if around
$150 to $200 billion foreign investing are not realized in the next
decade, according to the Iranian Parliamentary Research Center.
For
comparison, U.S. President Donald Trump's recent visit to Saudi Arabia
resulted in $380 billion in investments, consisting of $110 billion in
arms contracts. However, they never went the limits to boast these feats
as Iran has gone with a mere $5 billion deal.
The
unprecedented, and utterly disgraceful, aspect of the deal lies in the
fact that Total, a foreign company, owns 50.1 percent of contract share,
China owning 30 percent and Iran a mere 19.9 percent. As a result, the
management of this huge gas resource, belonging to the Iranian people,
will be handled by a foreign company.
According
to the Guardian Council, a body tasked to oversee the parliament's
actions, this contract is considered illegal based on Article 81 of
Iran's constitution. No contract should place over 50 percent of shares
to a foreign company, especially a long-term and classified company set
for 25 years.
Based on Article 77 of
the Iranian Constitution, the parliament must be informed of all foreign
contracts. There is no legal reasoning that even this regime's own MPs
have been kept in the dark about contract details.
Total
is not even obliged to transfer any technology to Iran as of yet. When
the gas field begins to lose its output only then is Total obligated to
provide Iran its technology.
Of
course, the development, production and other processes of this gas
field will take an uncertain amount of years — maybe even 15 years — and
when Iran will actually receive technology once the gas output begins
to plunge is anyone's guess.
And in
reference to Iran's claim of this deal signaling the sanctions wall
crumbling, such remarks are only aimed at maintaining a straight face
and cloak the failure of the nuclear deal to provide any tangible
outcomes.
Congress is back to work and Iran sanctions bill are high on agenda.
The
US has practically ripped up the nuclear arms deal with Iran, according
to the Financial Times. Washington's efforts to keep Iran at a distance
from the international banking system have had much the same effect.
The
Financial Action Task Force, an intergovernmental body established to
fight global money laundering, warned of the consequences of any deals
made with Iran.
FATF listed nine
countries, including Iran, who have failed to take action to tackle
financial measures aimed at providing to terrorists and money
laundering. FATF has practically called on all its members across the
globe to carry out special measures against the threats of economic
cooperation with Iran.
Iran is also
experiencing difficulties in receiving money for its petrochemical
products sold to China, according to this regime's Deputy Oil Minister
Marzie Shahedaie, citing new Chinese anti-money laundering laws.
Second,
only to oil, Iran's petrochemical products consist are this regime's
main export to China. Around 40 percent of Iran's petrochemical exports
are headed to Beijing, while four Chinese banks are refusing to issue
letters of credit to Tehran.
The
European Union has renewed its Iran list of sanctioned individuals and
entities involved in nuclear and ballistic missile activities. While no
names have been added the list does contain new information.
Individuals with renewed information on the EU list include 23 names such as:
- IRGC Quds Force chief Qassem Suleimani.
- Former IRGC chief Rahim Safavi.
- Former IRGC Basij chief Mohammad Reza Naqdi.
- Deputy Interior Minister for Security Affairs of Iran Mohammad Baqer Zolqadr.
- Former Iranian Atomic Energy Organization Fereydoon Abbasi.
- Mohsen Fakhrizadeh, also involved in Iran's controversial nuclear program
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