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Total says Iranian investment too risky, missile tests continue

Article published on the 2008-07-10 Latest update 2008-07-10 12:55 TU

Iran's Shabab-3 missile test(Photo: AFP)

Iran's Shabab-3 missile test
(Photo: AFP)

French oil and gas giant Total has declared that investing in Iran involves "too much political risk", making its involvement in an imporant gas projeect unlikely. The move was a boost to US efforts to economically isolate the country and push for an end to expansion of its nuclear programme.

In collaboration with Malaysian oil group Petronas, Total was involved in developing the South Pars gas field in Iran. Following the withdrawal Royal Dutch Shell and Repsol YPF in May, Total was left as the last major Western oil company with planned developments in the country.

But, in an interview published today, chief executive Christophe de Margerie told the Financial Times, that the investment would be taking "too much political risk".

People would say "Total will do anything for money," he told the British newspaper.

Total and the other Western oil groups have not ruled out future participation in the South Pars project, leaving open the possibility of rejoining the development at a later stage.

Oil and gas specialists say that without Western expertise, Iran’s plans to develop its gas fields will be severely hampered, even with Russians or Chinese help.

The US has been pushing for tougher action against Iran, claiming that it aims to develop nuclear weapons.

On Thursday Iranian television reported that the military fired more missiles and a torpedo on a third day of war games, which follow Israel’s recent manoeuvres in the Mediterranean.

Tests announced yesterday drew angry criticism from the US and Israel.

France's Foreign Affairs Minstry says that Total's announcement will not affect Europe's negotiations with Tehran on the nuclear dossier.