France’s oil giant Total to stay in Venezuela and Iran
but considers Iraq still too dangerous for investment

By Barbara Lewis and Marie Maitre

PARIS, Feb 13 (Reuters) - French oil company Total (TOTF.PA: Quote, Profile, Research) pledged on Wednesday to stay in Venezuela and Iran, two OPEC nations locked in disputes with the United States, but said it was still too dangerous to invest in Iraq.

Total has been at odds with Washington for years about its investments in Iran and faces growing domestic pressure as President Nicolas Sarkozy hardens France's stance against Tehran's nuclear activities.

Total has a long-standing deal to develop gas from Iran's huge South Pars field, but the project has been overshadowed by haggling over contract terms and dwindling French support.

"We have not burnt our bridges with Iran...We will find solutions to maintain our long-term presence," Chief Executive Officer Christophe de Margerie told an earnings news conference.

"It is important that despite the geopolitical and political difficulties that exist in all of the countries we work in, we find a solution to maintain our presence in the long term."

Sarkozy's conservatives last year urged Total and state-controlled Gaz de France (GAZ.PA: Quote, Profile, Research) not to invest in Iran as long as the stand-off over its nuclear activities continued.

The United States has accused Tehran of using nuclear enrichment plans as a cover for developing atomic weapons but Iran says it only wants energy for civil use.

The tension has helped to drive up world oil prices, which touched a record above $100 a barrel at the start of this year.

Chavez cuts off U.S. supplies

Tension between the United States and Venezuela is also supporting oil prices, which were above $92 a barrel on Wednesday.

U.S. company Exxon Mobil has won court orders freezing up to $12 billion in Venezuelan assets as it fights for compensation for a project nationalised by socialist President Hugo Chavez.

Chavez stopped oil exports to Exxon Mobil (XOM.N: Quote, Profile, Research) on Tuesday, after threatening to cut off all supplies to the United States.

"I don't want to comment on the situation of others. Everyone's looking at their own interest," de Margerie said.

"What I am mainly interested in is what Total does in Venezuela, (which) has very big reserves and needs the help and technology of international oil companies."

Venezuelan state oil company PDVSA this year agreed to pay $834 million in oil to Total to compensate for taking over part of its stake in its Sincor heavy oil production project.

"We have a reached an agreement so we have agreed to reduce our stake. It was with a heavy heart. I would have preferred to stay at 47 percent but at 30 percent this remains a very important project for Total and its future," de Margerie said.

Total is the world's fourth biggest non-government controlled oil and gas group by market capitalisation. It is the only major oil company still increasing its reserves as easily accessible oil becomes harder to find and high prices fuel protectionist measures in producer nations.

In Iraq, the government is desperate to attract foreign investment to restore the country's shattered oil industry but Total said the situation there was still too dangerous.

"The energy law has not come into effect and the security in the country is not good enough for us to operate there," de Margerie said.

"But this does not mean we are not taking part in discussions on how to prepare the future in an intelligent manner so as to avoid losing time."

Although it always denied breaching pre-war sanctions, Total was seen as close to signing major deals under former president Saddam Hussein. But following the U.S.-led invasion in 2003, which France opposed, it has had to compete with its rivals.

Iraq has given companies until Feb. 18 to submit documents that will qualify them to compete in future contract tenders.

De Margerie is under judicial investigation in France over accusations Total helped Iraq bypass sanctions under Saddam. A separate probe is examining whether Total paid bribes in Iran.

The head of France's biggest company was detained by police for two days over the Iraq allegations in 2006 but denied wrongdoing. The probes could drag on for months or years.