Total CFO: Costs of Iran Pars Project Well Above Expected

PARIS May 04, 2007 (Dow Jones Newswires)

Costs for Total SA's (TOT) planned $10-billion gas project in Iran have risen so much that it will take more time to decide its launch, Chief Financial Officer Robert Castaigne said Friday.

"Costs are well above what we expected," Castaigne said during a telephone conference call on the company's first- quarter results. "We're reviewing all the elements of the project," he said, adding that it's too early to give a timetable.

Total Chief Executive Christophe de Margerie said in April that costs at the project, which aims to extract gas from Iran's massive South Pars field in the Persian Gulf, "are so high that they are close to damaging the project."

Margerie has previously estimated the cost of the project, in which Total holds 30%, at almost $10 billion.

Malaysia's state run Petroliam Nasional Berhad, or Petronas, has a 20% stake while the National Iranian Gas Export Co. holds the remaining 50%.

The bulk of the investment consists of building a liquefaction plant, on which talks are concentrating, Castaigne said Friday.

Castaigne also said that geopolitical issues regarding Iran are adding to current difficulties.

Following the Dalia field startup in Angola mid-December, the Rosa field in the same offshore Block 17, will start production in the second quarter, Castaigne said.

The field, which should reach a plateau of 150,000 barrels a day, will enable the nearby Girassol field to maintain its plateau, which stands at 250,000 barrels a day, Castaigne added.

The Dolphin gas field off Qatar's northern coast will start producing in the summer, and should reach a plateau of 2 billion cubic feet of gas per day in 2008, Castaigne said.

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