Iran is on the road to economic recovery as Western companies finally begin to reinvest in the region. French oil and gas company Total (TOT) just finalized a multi-billion dollar deal on Tuesday to help the nation develop its South Pars gas field, the largest in the world.
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Earlier this year the Obama administration also granted aviation giants Boeing (BA) and Airbus permission to sell aircraft to Iran.
These new developments are among the first dealings with Tehran since sanctions were lifted on the country in January, upon affirmation of its compliance with the nuclear program; a determination that has been met with plenty of backlash.
President-elect Donald Trump has not been shy about his criticism regarding the administration’s nuclear deal with Iran, calling it “one of the worst deals [he has] ever seen.” Various members of the Trump campaign, including former New York Mayor Rudy Giuliani, have even suggested that along with the Affordable Care Act, Trump would immediately look to “fix” the terms of the nuclear deal with Tehran.
Does this spell trouble for companies with new investments in the country?
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Total is the first western energy company to make a commitment to Iran since the sanctions were lifted. Iran has significant potential to become a major player in the world’s energy industry, sitting on nearly 10% of the world’s oil reserves.
Total’s project contains two stages, the first of which will cost $2 billion. The resulting gas produced will be fed into Iran’s supply, which has been severely crippled as a result of the global financial restrictions.
The French company, which played a large part in developing the energy resources in the region prior to the imposition of sanctions, does not believe a pending Trump administration will have an impact on its deal to help develop the South Pars gas field.
Philippe Sauquet, Total’s head of gas, renewables and power, said on Wednesday “the election that took place in the United States does not change anything,” according to a report by Reuters.
Total, which has previously pledged to comply with international regulations, did not immediately return FOX Business’ request for comment.
The company’s stock was up slightly on Wednesday.
As for Boeing, its deal to sell 100 jets to Iran Air is not yet finalized, though it is on the verge of completion. In a statement to FOXBusiness.com the world’s number one plane maker responded to Trump’s victory on Tuesday night:
“We congratulate President-elect Trump and newly elected members of Congress and look forward to working with them to ensure that U.S. companies can compete, win and grow our economy to provide good jobs to U.S. workers; as well as preserve American leadership in national security,” the company’s vice president of communications, Gordon Johndroe, said.
Still, Boeing is not ruling out the possibility of having to halt its deal with Iran if Trump should decide to take a second look at the terms of the nuclear deal.
“Should the U.S. Government determine it is appropriate that the sanctions removed under the nuclear agreement “snap back” into place, we would comply with that determination,” Johndroe said.
Boeing’s stock was up 2% on Wednesday, the company is expected to benefit from higher defense spending promised by Donald Trump throughout his campaign for the White House.
Iran also reached a deal on Monday with a foreign leasing company to finance its purchase of 17 jets from Airbus, in what was widely considered a breakthrough in Tehran’s efforts toward acquiring a new fleet of aircraft.
As for Airbus, the company ensured its willingness to work with all relevant authorities in implementing its new deal.
“Airbus is working – and will continue to work – with the relevant authorities to ensure all of our business activities with Iran are undertaken in full compliance with applicable laws and regulations,” Clay McConnell, Airbus Americas head of communications, told FOXBusiness.com.