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Thu 10 Jul 2008 09:14 AM

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Total evades Iran investment

CEO of French energy group Total says will not invest in Iran because the political risk is too high.

French energy group Total will not invest in Iran because the political risk is too high, the company's chief executive Christophe de Margerie told the UK's Financial Times (FT)."Today we would be taking too much political risk to invest in Iran because people will say: 'Total will do anything for money'," the FT quoted Margerie in a report on Thursday.

Total has a memorandum of understanding with state-owned National Iranian Oil Company to develop Phase 11 of the South Pars field.

In May, Total said that it was still interested in the huge South Pars gas field, a project racked with political pitfalls for foreign oil companies due to concerns over Iran's nuclear programme.

Iran has said it wants Total to commit to the deal by mid-year but the French government, concerned about Iran's nuclear programme, has urged Total not to invest.

The US Congress has enacted a sanctions law to punish foreign companies that invest more than $20 million in Iran's oil or gas sectors.

The US has never punished foreign companies that appeared to violate the law, as the State Department can waive action against the firms, if doing so is deemed to be in the best interest of the United States.

Washington says Tehran seeks atomic bombs, but the leaders of Iran, the world's fourth largest oil producer, say its nuclear programme is only for electricity.

Iran test-fired nine missiles on Wednesday and warned the United States and Israel it was ready to retaliate for any attack over its disputed nuclear projects. (Reuters)

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