Iran on Monday signed a $5 billion agreement with France's Total SA and a Chinese oil company to develop its massive offshore natural gas field, the first such deal with foreign companies since the landmark 2015 nuclear deal with world powers.
Officials in Tehran signed the agreement, which will see the firms develop a portion of the massive South Pars offshore field that Iran shares with Qatar.
Total has a 50.1-percent share in the deal. The state-owned China National Petroleum Corp. has 30-percent stake and Iran's Petropars has 19.9 percent.
The development at phase 11 of the South Pars field will see 20 wells and two wellhead platforms built and connected to existing facilities by two underwater pipelines, Total said. A second phase will involve the construction of offshore compression facilities, the firm said.
Total said the project will have a capacity of 2 billion cubic feet of natural gas a day or 400,000 barrels of oil equivalent per day, including condensate.
"This is a major agreement for Total, which officially marks our return to Iran to open a new page in the history of our partnership with the country," Total chairman and CEO Patrick Pouyanne said in a statement. "Total will develop the project in strict compliance with applicable national and international laws."
During the ceremony, Iranian Oil Minister Bijan Zanganeh congratulated all involved in the deal, saying it will lead to "more than $5 billion in foreign investments."
He also held out a hand to U.S. oil companies, saying his country needs some $200 billion of investments in its oil industry in the next five years to make up for time lost during sanctions. Iran hopes to produce 6 million barrels of crude oil and condensates a day in five years, he said, up from some 3.6 million today.
"We do not consider any obstacle for the participation of American companies," Zanganeh said. "The main obstacle is being created by the U.S. government."
Iran sits atop the world's fourth-largest oil reserves and the second-biggest stores of natural gas. Since the nuclear deal, which saw Iran limiting its enrichment of uranium in exchange for economic sanctions being lifted, the country has quickly boosted its crude oil production and sold what it had in floating reserves. Monday's deal will further boost its coffers and secure a new supply of natural gas for domestic consumption, beginning in 2021.
The 20-year contract also offers a vote of confidence for Iran in the business world, especially as U.S. President Donald Trump has threatened to try and renegotiate the nuclear accord.
Total pulled out of Iran in 2006 as United Nations sanctions first took hold over fears Iran's atomic program would be used to build nuclear weapons. Tehran has maintained its program is only for peaceful purposes.
In the time since the nuclear deal, Iran has seen success in other business ventures. Boeing Co. and its European rival Airbus have signed billions of dollars in deals with Iran Air, all already approved by the U.S. Treasury.
Chicago-based Boeing also signed a $3 billion deal in April to sell 30 737 MAX aircraft to Iran's Aseman Airlines, a firm owned by Iran's civil service pension foundation. The Boeing sales represent the first major deals for an American company in Iran since the 1979 Islamic Revolution and U.S. Embassy takeover.