What Happened: French oil and energy company Total announced that it may withdraw from the Iran South Pars 11 (SP11) energy project, following U.S. President Donald Trump's decision to pull out of the Iran nuclear deal, formally known as the Joint Comprehensive Plan of Action, Reuters reported May 16.
Total underscored it would be highly vulnerable to possible USA sanctions given that the company has a whopping 10 billion dollars of capital employed in its United States assets, while American banks are involved in 90 percent of Total's financing operations.
The nuclear agreement, worked out by the USA under former President Barack Obama, together with five other world powers and Iran, lifted sanctions on Iran in exchange for limits on its nuclear programme.
German insurer Allianz and Danish tanker operator Maersk are also winding down their business in Iran.
By contrast, Total said it had spent less than 40 million euros ($47 million) on the Iranian project, which it runs with its partner Petrochina and which is dedicated to the supply of domestic gas inside Iran.
"The risks of being on the wrong side of the US government are not worth the benefits of trading with Iran once the sanctions are in place", said Jason Gammel, a London-based analyst at Jefferies LLC.
LONDON-European firms have started pulling back investment and abandoning commitments in Iran, responding to a decision last week to reimpose broad American sanctions on Tehran by year end.
"Total, together with the other partner Petrochina, executed the contract related to the South Pars 11 (SP11) project, in full compliance with United Nations resolutions and US, EU and French legislation applicable at the time", the statement said.
The company added that it will not be able to continue operations unless it is given a project waiver by USA authorities, with the support of French and European authorities.
Companies caught violating sanctions could be cut off from the U.S. financial system and targeted with a range of other punishments.
"This project waiver should include protection of the Company from any secondary sanction as per United States legislation", the company noted.
Joe Kaeser, the CEO of Germany's Siemens, told CNN his company would not be able to do any new business with Tehran.
Iran's oil minister Bijan Zanganeh said on May 16 that Tehran would survive the renewed sanctions.
An official in the French finance ministry said "precise requests" were being lodged with the US authorities, including for Total, and that the company's decision was not a surprise.
The total project, which also involves China 's CNPC and Iranian company Petropars, is estimated to be around $2 billion for the first phase.