Total takes more nuanced tone over petrol sales to Iran

For a long time, Total, the French oil company, has been one of the boldest of its peers when it comes to venturing to politically troublesome countries. Burma, Sudan and Nigeria are all on the list of countries in which it has investments.

The stock line has been that unless United Nations sanctions prohibit investment, Total will consider the country fair game.

Here is how Christophe de Margerie, Total’s chief executive, summed up his philosophy in a recent interview with the FT (the quote has been edited for length and clarity):

“If you get out because you cannot always be faced with a very nice environment and want to just wait to have security, have peace, then change your business. Our business is a difficult one, but it is a responsibility of a big company to be able to face those challenges.”

Despite the seeming bravado in his argument, de Margerie says investing early and in places other companies fear to tread is a deliberate strategy. Such early action comes with the advantages of being able to pick the best assets and extract more favourable contractual terms out of the government with which Total is negotiating, he says.

But even de Margerie has brought more subtlety into his stance and tone over the years. The first serious sign of his pragmatism came in the summer of 2008 when he acknowledged that investing in Iran was too politically risky.

That change in position meant Total’s liquefied natural gas project in Iran would not see the light of day any time soon.

More recently, stopping companies from selling petrol to Iran has become a priority for Washington. While, BP and even many of the commodities trading houses have bowed to Washington’s pressure, Total has continued its small volume of sales.

But it now looks like Total won’t be waiting for UN sanctions to be dissuaded from its trade.

De Margerie this week told reporters quizzing him on impending retaliatory US sanctions against companies that sell petrol to Iraq. From Reuters:

“If any laws, or any rules are made in a way that prevents (us) from doing those things we will stop,” he said. “We always respect laws.” He added: “I’ve been asked by certain people to reconsider, I say OK, make it official,” he said.

It is a pragmatic decision. Not only is the US a very large market for petroleum products sales, it is also home to 11,000 people working for Total, several of the company’s big investments and 24 per cent of its shareholders.

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