French energy giant Total has reportedly quit its business in Iran after failing to negotiate a waiver deal with the US that would have exempted it from impending sanctions, and allowed it to continue business with Tehran.

Total’s CEO Patrick Pouyanné has said that his company has withdrawn from the South Pars gas project in Iran since it could not secure a sanctions waiver from the US.

“There is no other way than to leave Iran’s lucrative project,” Pouyanné has been quoted as saying in a local media report.

“You cannot operate in 130 countries in the world without accessing the US financial system. Therefore, we are enforcing and complying with US laws and have to leave Iran’s profitable market,” he said.

“A company like us should respect the laws that are enforced, so…we have to leave Iran,” he added.

In early June, Tehran set Total a deadline of 60 days to win a sanctions reprieve from the US, failing which the French company’s majority 50.1 per cent stake in the South Pars project will be awarded to another company, most likely the China National Petroleum Company (CNPC), the second-largest stakeholder in the project.

It remains unclear whether CNPC will now be allowed by Iran to acquire all of Total’s stake, following the latter’s departure, potentially making it the owner of 80.1 per cent stake.

Total has suffered an estimated $40m loss due to moving out of the phase 11 of the South Pars gas field expansion project in the Gulf’s waters, according to Pouyanné.

Total signed the $1bn deal to develop the South Pars gas field in July last year, the first major Western energy investment in the Islamic Republic since international sanctions were lifted as part of a landmark agreement in 2015 over Iran’s nuclear programme.

Pouyanné has expressed hope that his company could be able to return to Iran in future, saying, “For a company like Total which invests $15bn annually, suffering loss of $40m is negligible.”

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