IRAN AND LIBYA SANCTIONS ACT (ILSA): TOTAL ON ITS

C O N F I D E N T I A L PARIS 006326 SIPDIS STATE FOR EB/ESC, EUR/WE, EUR/ERA, NEA/NGA AND EAP/J E.O. 12958: DECL: 09/20/2021 TAGS: ETTC EINV EPET FR IR SUBJECT: IRAN AND LIBYA SANCTIONS ACT (ILSA): TOTAL ON ITS REPORTED INTEREST IN AZADEGAN PROJECT REF: A. PARIS 6211 ¶B. STATE 148000 Classified By: Classified by Econ Minister Thomas White for Reasons 1.5 (d) and (e). ¶1. (C) Summary. Total has not yet made irrevocable decisions to invest in the Azadegan Project. Until the UN Security Council agrees on international sanctions, however, Total would consider geographical, technical, and political risks in evaluating investment possibilities in Iran, a senior Total official told embassy officers. End summary. ¶2. (SBU) On September 19, EconCounselor followed up previous meetings with the GOF (ref a) to convey ref b points to Total International Relations Senior Vice Hubert Loiseleur des Longchamps on Total's reported interest in Iran's Azadegan Project. Total Vice President Romaric Roignan also joined the meeting. EconCouns underlined that the timing of a possible investment would be particularly unfortunate given Iran's failure to comply by August 31 with UN Security Council Resolution 1696. ¶3. (C) des Longchamps responded that Total's role as an oil company was the exploration and production of oil and gas resources. Other large oil firms had a productive base in more stable countries with Exxon, Chevron, and Conoco producing in the U.S. and British Petroleum and Shell drilling in the North Sea. Total had no such base and its efforts focused on locations with greater geological, technical, and political risk. The international petroleum market had little spare capacity and Iranian oil was important to ensuring market stability. EconCounselor acknowledged the challenging conditions that Total, like other oil companies, faced in difficult operating environments. But Iran was a special case and it was important not to send a "business as usual" signal, particularly at this sensitive time. ¶4. (C) The UN Security Council (UNSC) has not yet imposed sanctions on Iran, des Longchamps said. If the UNSC adopted international sanctions, Total would respect them. In the meanwhile, however, Total had to pursue the interest of its shareholders. Without Total participation, the Japanese firm Inpex would likely proceed with the Azadegan project, since Total would have only a minority share. des Longchamps assured us that Total has taken no irreversible decisions yet, and he promised to inform other relevant Total officials of the U.S. position. Please visit Paris' Classified Website at: http://www.state.sgov.gov/p/eur/paris/index.c fm STAPLETON