Total's CEO Patrick Pouyanne hailed the deal as "a historic day, the day we come back to Iran," as he signed the gas agreement with Iranian authorities and the state-owned China National Petroleum Corporation in Tehran on Monday after a multi-year delay.

Total will put in an initial $1 billion (876 million euros) for the first stage of the 20-year project and take a 50.1 percent interest. Its investment will eventually reach $5 billion. NPC will own 30 percent and Iran's Petropars 19.9 percent.

Gas for Iranian market

Phase 11 of the South Pars gas field will produce gas for the Iranian market from 2021. The site will eventually pump 50.9 million cubic meters (1.8 billion cubic feet) of gas per day into Iran's national grid.

The offshore field was first developed in the 1990s and Total was one of the biggest investors in Iran until international sanctions were imposed in 2006 over suspicions that Tehran was trying to develop nuclear arms.

Read more: France to stop granting oil exploration licenses

Read more: Global voices call for fossil fuels divestment

The French energy giant had to abandon the original deal for phase 11 in 2012 when France and other European Union states imposed additional sanctions, including an oil embargo on Iran.

Waiting to return

Total has been keen to reenter the Iranian market since a 2015 landmark accord between Iran and six world powers, which eased sanctions on Tehran in return for curbs on its nuclear program.

Although the deal was finalized late last year, the phase 11 announcement was delayed for several months after US President Donald Trump threatened during his election campaign to tear up the nuclear agreement.

But although Trump has imposed fresh restrictions concerning Iran's ballistic missile program and military activities in the region, he is yet to follow through with his original plan.

During Monday's ceremony, Iranian Oil Minister Bijan Zanganeh held out a hand to US oil companies, saying his country needs some $200 billion of investments in its oil industry in the next five years to make up for time lost during sanctions. 

Iran, which has the second-largest gas reserves and fourth-largest oil reserves in the world, has also signed preliminary deals with Shell and Russia's Gazprom to develop oil and gas projects.

mm/rd (AFP, Reuters)