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Iran agrees oil deal with French energy giant

Total says it will sign contract for up to 200,000 barrels of oil a day, as Iranian president wraps up French visit
French PM Manuel Valls and Iranian President Hassan Rouhani (AFP)

French energy giant Total will sign a contract with Iran to buy crude oil, the company's chief executive said on Thursday after meeting Iranian President Hassan Rouhani during his visit to France.

"We plan to sign a contract which will allow us to take between 150,000 and 200,000 barrels of crude a day," Patrick Pouyanne said.

The deal will be signed at the French presidential palace later on Thursday.

With the end of economic and financial sanctions, Iran has decided to increase its oil production to 500,000 barrels a day, a decision which further weakened oil prices last week.

The price of crude oil is currently around $32 a barrel, about 70 percent less than it was in June 2014.

Iran, which has the world's fourth-largest oil reserves, currently produces 2.8 million barrels a day, about a million of which are destined for export.

Pouyanne said other French projects were also in the pipeline with Iran.

"Total has been very present in Iran, very loyal to Iran. We have obviously envisaged other projects but they need to be discussed," he said.

Rouhani on Thursday hailed a "new relationship" between Iran and France during his visit.

"Let us forget the resentment," Rouhani said, calling for both countries to take advantage of the "positive atmosphere" following the removal of sanctions over the Islamic Republic's nuclear programme.

"We are ready to turn the page" and establish a "new relationship between our countries," Rouhani told a meeting of business leaders.

French Prime Minister Manuel Valls responded that "Iran can count on France."

"France is ready to use its companies, its engineers, its technicians and its many resources to help to modernise your country," Valls said.

Rouhani was welcomed to Paris with military honours and national anthems on the second leg of a trip signalling Iran's rapprochement with Europe since sanctions were lifted.

The real business of the visit will come when Rouhani officially signals Iran's intention to buy more than 100 passenger planes from European aircraft maker Airbus.

French car-maker Peugeot said it would return to the Iranian market in a five-year deal worth $436mn that was also announced on Thursday.

Peugeot will produce 200,000 cars a year in a joint venture with local manufacturer Iran Khodro, according to a statement.

The company was forced to pull out of Iran in 2012 as sanctions began to bite.

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