Chinese state-owned oil company CNPC is said to be ready to take over exploitation rights on the South Pars project after French energy giant Total signalled on Wednesday it could exit Iran.

Iran possesses the second-largest gas reserves on the planet, after Russia, and the fourth-largest oil supplies.
Iran possesses the second-largest gas reserves on the planet, after Russia, and the fourth-largest oil supplies. (AFP)

Chinese state-owned oil company CNPC will replace Total on a major gas field project in Iran if the French energy giant pulls out over renewed US sanctions against Tehran, Iran's oil minister has said.

"Total has said that if it doesn't get an exemption from the United States to continue its work, it will begin to pull out of the deal," Bijan Namdar Zanganeh was quoted as saying by his ministry's Shana news service.

"If that happens, the Chinese firm CNPC will replace Total."

Total started the $4.8-billion South Pars 11 project in July 2017, two years after Western powers signed a nuclear deal with Tehran prompting the return of many businesses to Iran.

But earlier this month, US President Donald Trump announced his withdrawal from the deal, and warned companies that they face sanctions if they do business with Iran.

The French group said on Wednesday it has $10 billion of capital employed in its US assets, and US banks are involved in 90 percent of its financing operations, making Total highly vulnerable if targeted by any US actions.

By contrast, Total said it had spent less than $47 million on the Iranian project, which it runs with its partner Petrochina and which is dedicated to the supply of domestic gas inside Iran.

Zanganeh said on Wednesday that were CNPC, which was part of the Total deal, unable to carry out the work in South Pars due to US sanctions it would fall to Iran's Petropars.

Iran possesses the second-largest gas reserves on the planet, after Russia, and the fourth largest oil supplies.

Source: AFP