Dentons has taken the lead advising French oil and gas company Total in signing a £4bn ($5bn) contract with Iran’s national Oil company, the republic’s first energy deal with a foreign enterprise since sanctions eased 18 months ago.
The Dentons UKMEA and Europe teams acting for Total were led by Paris-based partner Ramin Hariri and London-based partner Alistair Black with support from partners Charles Wood and Andrew Cheung.
Total will work on the development of one of the largest offshore gas fields in the world, to supply the Iranian domestic market from 2021 with a capacity of 400,000 barrels a day.
The French company will have a 50.1% stake in the project. Petropars, a fully-owned subsidiary of National Iranian Oil Company (NIOC), will hold a 19.9% interest and Chinese state-owned oil and gas company CNPC 30%.
Total is a longstanding client of Dentons. In 2014, Dentons advised Total on $48.1m UK shale gas licences at a time when the unconventional method of extracting shale gas was becoming more widespread a phenomenon in the UK. Total was the first major oil company to invest in UK shale.
The Chinese oil company and NIOC were advised by internal lawyers.
The deal is the first long-term agreement the Islamic Republic of Iran has signed since it negotiated a 2015 plan with China, France, Russia, the UK, US and EU to end its military nuclear programme in exchange for relaxing sanctions. This took effect from January 2016.
In 2015, Total cut its legal panel roster to increase price competition between law firms.
The reluctance of banks to be involved with money coming from and going to Iran remains an issue for potential investors in the area, but Legal Business understands Total had sufficient cash flow to be able to invest in the project without requiring additional funds in the initial phases.
