Total "will have to unwind all related operations before 4 November 2018", the company said, referring to a deadline set by the US Treasury Department for companies to wind down their operations before sanctions go into effect - "unless Total is granted a specific project waiver by the US authorities with the support of the French and European authorities".
Italy's Eni, which last June signed a provisional agreement with Tehran to conduct oil and gas feasibility studies, said after Washington's decision to quit the nuclear deal last week that it had no plans for new projects in Iran.
Total will pull out of a multibillion-dollar gas project in Iran if it can not secure a waiver from USA sanctions, the French energy company said on Wednesday. While the French company was speaking about a natural gas project, its reluctance to continue operating there could equally apply to others that rushed back into sectors from automobiles to aviation and engineering to the oil trade.
But Total's announcement and similar ones by German insurance giant Allianz and Danish tanker giant Maersk earlier this week illustrate the major obstacles they face trying to overcome renewed US sanctions on Iran.
Other European companies including Volkswagen and Airbus have forged business ties with Iran since the breakthrough 2015 deal was signed.
Background: Despite the US withdrawal, Iranian Foreign Minister Javad Zarif met with European Union leaders on May 15 to discuss how to circumvent USA sanctions in an effort to salvage the nuclear deal.
"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, an analyst at Jefferies LLC.
Iran has said it may start enriching uranium again if it can no longer see any economic benefit from sticking to the deal.
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In its statement, Total said it was requesting a waiver that would protect it from all "secondary" sanctions under USA legislation, and that it had engaged United States and French authorities to "examine the possibility" of an exemption.
The group said it has $10 billion of capital employed in its USA assets, and United States banks are involved in 90 percent of its financing operations, making Total highly vulnerable if targeted by any U.S. actions. "There will be niche players who will far more benefit from trading with Iran than risk from the US system, but it's going to be a very small set of players that are not going to be particularly well capitalized".
Despite the US' withdrawal, the European Union said it would remain committed to the deal and would ensure sanctions on Iran remain lifted, as long as Tehran meets its commitments. Managing Director Ali Kardor said this month.
Against this, Complete mentioned it had spent lower than 40 million euros ($47 million) on the Iranian challenge, which it runs with its associate Petrochina and which is devoted to the provision of home gasoline inside Iran.
Withdrawing from the South Pars 11 project will also not affect Total's target to raise the company's production by 5 percent a year between 2016 and 2022, according to the statement.
Total also bought about 56 million barrels of Iranian crude for almost 2.6 billion euros a year ago, primarily for its own refineries, according to its annual report.
Total's announcement comes after German insurer Allianz (ALVG.DE) and Danish oil product tanker operator Maersk Tankers said they were winding down their businesses in Iran.
The company didn't say if these trades will be affected.