Total to Continue Gas Talks with Iran If No Int'l Ban

PARIS Feb. 27, 2007 (Dow Jones Newswires)

French oil giant Total SA (TOT) will continue talking with Iran on developing a gas project in the Persian Gulf unless there is an international ban on doing business with the Islamic republic, Total Chairman Thierry Desmarest said Tuesday.

"We're still in talks to see if we can reach satisfactory terms with the Iranians," Desmarest said at a breakfast meeting with reporters.

"We've made progress, but we haven't found all the solutions. Once we have, we'll evaluate the state of the relations between Iran and the international community," he said.

The company expects to be able to make a decision to start drilling at the South Pars gas field, in Iran's part of the Persian Gulf "in the next few months," Yves-Louis Darricarrere, the company's chief of exploration and production, told reporters two weeks ago on the sidelines of the annual results presentation. The company will weigh geopolitical risks once technical and commercial discussions are over, Darricarrere said.

While there is no ban on doing business with Iran, the International Atomic Energy Agency has reported that Iran has refused to abide by U.N. Security Council resolution to suspend uranium enrichment. On Monday, the five permanent U.N. Security Council members and Germany met to discuss ways to resolve with the standoff with Iran. After the meeting they said they were committed to seeking "a negotiated solution," but further sanctions haven't been ruled out.

While nuclear proliferation is a major issue, Iran does hold the world's second-largest oil and gas reserves, Desmarest said.

The South Pars gas field holds about 1 billion barrels of proven reserves and won't start producing before 2011, Darricarrere said two weeks ago.

At an Iranian investment conference in Vienna in early February, Iranian oil officials said they hoped that a deal would be signed with Total by late March, which is also the end of the current Iranian calendar year.

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