Iran has signed a £3.8 billion agreement with France’s Total SA and a Chinese oil company to develop its massive offshore natural gas field – the first such deal with foreign companies since the landmark 2015 nuclear deal.
The agreement, signed in Tehran on Monday, will see the firms develop a portion of the massive South Pars offshore field, which Iran shares with Qatar.
Total has a 50.1% share in the deal.
The state-owned China National Petroleum has a 30% stake, while Iran’s Petropars has 19.9%.
The deal includes 30 wells and two production units.
Officials anticipate the deal will see gas production increase to nearly 600 million cubic meters from the current 540 million cubic meters.
The development at phase 11 of the South Pars field will see 20 wells and two wellhead platforms built and connected to existing facilities by two underwater pipelines, Total said.
A second phase will involve the construction of offshore compression facilities.
Total said the project will have a capacity of two billion cubic feet of natural gas a day, or 400,000 barrels of oil equivalent per day, including condensate.
Total chairman and CEO Patrick Pouyanne said in a statement: “This is a major agreement for Total, which officially marks our return to Iran to open a new page in the history of our partnership with the country.
“Total will develop the project in strict compliance with applicable national and international laws.”
During the ceremony, Iranian oil minister Bijan Zanganeh congratulated all involved in the deal, saying it will lead to “more than five billion dollars in foreign investments”.
He also held out a hand to US oil companies, saying his country needs some 200 billion dollars (£153 billion) of investments in its oil industry in the next five years to make up for time lost during sanctions.
Iran hopes to produce six million barrels of crude oil and condensates a day in five years, he said, up from some 3.6 million today.
Mr Zanganeh said: “We do not consider any obstacle for the participation of American companies.
“The main obstacle is being created by the US government.”
Iran sits atop the world’s fourth-largest oil reserves and the second-biggest stores of natural gas.
Since the nuclear deal, which saw Iran limiting its enrichment of uranium in exchange for economic sanctions being lifted, the country has quickly boosted its crude oil production and sold what it had in floating reserves.
Monday’s deal will further boost its coffers and secure a new supply of natural gas for domestic consumption, beginning in 2021.
The 20-year contract also offers a vote of confidence for Iran in the business world, especially as US president Donald Trump has threatened to try and renegotiate the nuclear accord.
Total pulled out of Iran in 2006 as United Nations sanctions first took hold over fears Iran’s atomic programme would be used to build nuclear weapons. Tehran has maintained its programme is only for peaceful purposes.
In the time since the nuclear deal, Iran has seen success in other business ventures.
Boeing and its European rival Airbus have signed deals worth billions of dollars with Iran Air, all already approved by the US Treasury.
Chicago-based Boeing also signed a three billion dollar (£2.3 billion) deal in April to sell 30 737 MAX aircraft to Iran’s Aseman Airlines, a firm owned by Iran’s civil service pension foundation.
The Boeing sales represent the first major deals for an American company in Iran since the 1979 Islamic Revolution and US Embassy takeover.