French oil giant Total has pulled out of Iran and scrapped plans for a billion-dollar project in the country as new US sanctions on Tehran continue to bite.

The energy firm’s departure was announced by Iran’s oil minister who reportedly told state media the company is leaving in response to threats from Washington to sanction companies that do business with the Islamic republic.

Total had agreed to develop phase 11 of Iran’s South Pars gas field – the largest natural gas field in the world.

But the firm had previously signalled it would abandon the £740million ($1billion) project unless it could secure waiver which would allow it to continue the project free from the threat of sanctions.

Total’s departure comes as a huge blow to Iran and is the first major energy scheme to be scuppered by US sanctions.

Iran has hinted China’s state-owned CNPC could step in to take over Total’s stake in the scheme.

Revealing the departure of the French firm today, oil minister Bijan Zanganeh told Iranian state media: “Total Iran has officially left the contract to develop the South Pars Gas project’s phase 11.

“The process to replace Total with another company is underway.”

The oil giant’s withdrawal comes after President Donald Trump announced the US was pulling out of the 2015 Iran nuclear deal and reimposing sanctions on the Islamic republic.

Washington has since demanded its allies cut – and eventually stop – buying Iranian oil. A new round of sanctions on Iranian oil sales is scheduled to kick in later this year.

Mr Trump followed up his announcement to quit the nuclear accord by warning countries and companies which continue to trade with Iran would also be slapped with sanctions.

He tweeted: “Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!”

President Trump had previously branded the 2015 deal the “worst ever” and insisted it should have included terms which prevented Tehran developing ballistic missiles and stoking conflicts across the Middle East.

The US leader said the pressure from renewed sanctions will eventually force Iran back to the negotiating table to agree to a new deal.

But European leaders insist the Obama-era accord, which granted Iran sanctions relief in exchange for curbs on its nuclear programme, is worth keeping despite its flaws.

Iran has condemned the actions of Mr Trump and said his actions are proof the US cannot be trusted.

Tehran has also warned it may start enriching uranium again if it can no longer see any economic benefit to the agreement.

Source » express