Total is talking to CNPC about possibly joining it in developing part of Iran’s giant South Pars gas field and exporting liquefied natural gas from it, Total Chief Christophe de Margerie said.

But Total’s involvement in that project has been complicated in part by disagreements with CNPC and Iran over how to proceed.
In June, Iran and CNPC signed a contract to work on extracting gas from part of the South Pars field, known as Phase 11. CNPC in effect replaced Total, which had long been in negotiations with Tehran about the huge gas field but which has pushed for an integrated project that includes the extraction of gas, its transformation into liquefied natural gas and the export of that LNG.
“We have been always favoring the full integrated project” in South Pars, Mr. de Margerie said. “CNPC and Iran separated the two, upstream from LNG, and we’ve said that was not our cup of tea,” he added.
Total continues to talk to CNPC about the possibility of an integrated LNG project in South Pars, Mr. de Margerie said. But any deal would require Iranian-government approval, and “Iran, for the time being, has stopped” discussing LNG.
Total and Mr. de Margerie have come under fire in the past for their involvement in Iran, primarily from U.S. politicians critical of the country’s government.
Mr. de Margerie said Monday he thinks Total must continue to talk to governments such as Iran’s because energy investments are long-term and politics change. “If you just say, “OK, there is a problem today, so I will never look at it anymore,” then you never do anything,” he said.
The French executive, who took the helm at Total Mr. de Margerie said he is confident the two will move forward with the project, which would still require final approval from China’s government. Gas production would start in 2013 at the soonest.
Total SA is looking to expand its cooperation with China’s leading oil producer on a range of fronts, including a multibillion-dollar natural-gas project in northern China and prospective overseas deals in Iran and Venezuela, its chief executive said in an interview.
The French oil-and-gas company has been aggressive about cooperating with China, although some of its efforts have stumbled or failed. The cooperation reflects Chief Executive Christophe de Margerie’s belief that Total is better off trying to forge partnerships with rising competitors from the world’s most populous country than strictly trying to compete.
Mr. de Margerie said Total aims to make a joint bid with CNPC to develop a heavy-oil block in Venezuela’s Carabobo region. He declined to estimate timing or investment for that possible project.
Total and CNPC, in partnership with Petronas, Malaysia’s state-owned oil-and-gas company, won the rights to the relatively small Halfaya oil field in Iraq earlier this month. But Total and CNPC lost out in their joint bid to develop Iraq’s giant Majnoon oil field; Mr. de Margerie said competing bids were too high to make the project cost-effective for Total.
(Source: The WSJ)