Reuters: The head of French oil company Total SA said on Monday no new contract for the second phase of development of the South Pars gas field in Iran would be signed before the Iranian New Year, which begins on March 21.
By Matt Daily
NEW YORK (Reuters) – The head of French oil company Total SA said on Monday no new contract for the second phase of development of the South Pars gas field in Iran would be signed before the Iranian New Year, which begins on March 21.
Chief Executive Christophe de Margerie said statements by the head of the National Iranian Oil Co that a $5 billion deal would be announced soon were not correct.
"If it was true I would know it," de Margerie told reporters at meeting in New York. "We will not sign a contract that is not profitable."
Total has a memorandum of understanding with the state-owned NIOC to develop the second phase of the massive South Pars field, but the French company has said the talks were moving very slowly.
Last week, the head of NIOC was quoted on Iranian state television saying a deal would be signed by the end of the Iranian year on March 20.
Total has been under pressure to stay out of Iran as the French government and previous U.S. administration sought to isolate Tehran because of its nuclear program.
De Margerie also said he expected Total's Joslyn oil sands project in Canada to proceed more slowly, and would not reach its maximum capacity of about 250,000 barrels per day until the end of the next decade, rather than some time after 2015 as previously expected.
"Definitely it is for the end the decade," de Margerie said.
Canada's oil sands are one of the main development areas in the globe for new oil supplies but high costs of bringing those projects on line and a steep drop in oil prices have prompted companies to defer or cancel more than C$90 billion in planned investments.
Total had previously delayed to 2014 the first phase of Joslyn production which had targeted 100,000 barrels per day by 2013.
Total's minority partners in the Joslyn project are Occidental Petroleum, Japan's Inpex Corp and privately held Laracina Energy.
De Margerie declined to comment on any further steps the company would take as part of its $500 million bid for Canadian oil sands company UTS Energy Corp, which has rejected the offer as too low.
He also said he was not surprised by reports that large UTS shareholders had said they believed their shares were worth more than the C$1.30 that Total had offered.
"They said they want more. I would be surprised if they said they want less," he joked.
De Margerie also said a project at its Port Arthur, Texas, refinery to expand capacity to process heavy and sour crudes would not be slowed, and said it would be online in 2012.
The company had previously said the new units at the refinery would start up in 2011, and a company spokesman said there was no change in the timing of the project.
(Reporting by Matt Daily, editing by Gerald E. McCormick and Matthew Lewis)