Problems Encountered at South Pars Phase 11

Iran sees problems with Total, which is negotiating terms for phase 11 of Iran's giant South Pars gas field, Deputy Oil Minister Mehdi Mirmoezi said on Monday. "The price difference between dollars and euros and the increased price of steel have made contractors doubt about the prices offered," he added.

Iranian development contracts are drawn up in dollars but European companies pay expenses in euros.

Total said in April it hoped the South Pars 11 deal was close to being concluded.

Iranian officials have linked South Pars 11 with a $2 billion liquefied natural gas (LNG) venture called PARS LNG. Total and Petronas formed PARS LNG in collaboration with the state oil company in February.

Total's country representative Francois Vatier declined to give details on what was dragging out talks. "We are discussing the commercial terms and I cannot comment more," he said.