Iran on Monday signed a $5-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 with world powers.
Officials in Tehran signed the agreement, which will see the firms develop a portion of the massive South Pars offshore field that Iran shares with Qatar.
Total has a 50.1% share in the deal. The state-owned China National Petroleum Corp. has 30% stake, and 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.
During the ceremony, Iranian Oil Minister Bijan Zanganeh congratulated all involved in the deal, saying it will lead to “more than $5 billion in foreign investments.”
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 President 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 nuclear program would be used to build nuclear weapons. Tehran has maintained its program is only for peaceful purposes.
In the time since the nuclear deal, Iran has seen success in other business ventures. Boeing Co. and its European rival Airbus have signed billions of dollars in deals with Iran Air, all already approved by the U.S. Treasury.
Chicago-based Boeing also signed a $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 U.S. Embassy takeover.