Iran will sign a multi-billion dollar natural gas contract with France’s Total and China’s CNPC on Monday, amid extended sanctions relief aimed toward the Islamic Republic.
"The international agreement for the development of phase 11 of South Pars will be signed on Monday in the presence of the oil ministry and managers of Total, the Chinese company CNPC and Iranian company Petropars," an Iranian oil ministry spokesman told AFP.
The deal totals $4.8 billion according to a Total press release from November 2016, which is the biggest foreign deal for Iran since nuclear sanctions were eased.
Total holds a 50.1 interest in the South Pars project with state-owned China National Petroleum Corporation owning 30 percent and Iran's Petropars 19.9 percent, the national Iranian oil company announced.
The offshore field was developed in the 1990s and Total was one of the initial and primary investors until international economic sanctions were levied against Iran in 2006.
Iran has the second-largest gas reserves and the fourth-largest oil reserves in the world. Energy deals with foreign entities face scrutiny in Iran with conservatives worried that they will lose market share.
Total's Chief Executive Patrick Pouyanne told Reuters last month that the group would make an initial $1 billion investment after the United States extended sanctions relief.
European energy companies had faced hefty penalties from doing business in Iran since 2005; however, US President Barack Obama issued “waiver orders” in 2016. That led to the European Union terminating many economic sanctions including the embargo on purchasing crude oil and gas.
Current US President Donald Trump is still reviewing the sanctions against Iran, as his administration has maintained that Tehran is linking nuclear enrichment to its ballistic missiles. Iran maintains that it does not have a weaponized nuclear program, and its missiles are for defensive purposes only.
Trump has called the Iran nuclear deal (JCPOA) a “disaster,” which was agreed upon between Iran and the permanent members of the UN Security Council and the European Union and Germany (P5+1) in July 2014, and came into effect in January 2016.