Iran sees "renewed strength" in South Pars gas work

TEHRAN (Reuters) - Iran's oil minister said it was working with "renewed strength" in developing a major gas field after French firm Total (TOTF.PA) said it would not invest in the project for now because of political tension.

The United Nations and Western countries have ratcheted up sanctions on the Islamic Republic, which test-fired missiles this week, over its disputed nuclear plans, which analysts say is deterring foreign investors.

Total chief executive Christophe de Margerie told the Financial Times in an interview published on Thursday that his firm would not invest in Iran because the political risk was too high.

Oil Minister Gholamhossein Nozari said Total's decision was a political move: "Our recommendation to the company is that commercial concerns should not enter the political arena and (they) should carry on with their commercial work."

He added in an interview with the state broadcaster IRIB: "Upon hearing the news, we began work in this phase with renewed strength and we will continue that with strength."

Total has a memorandum of understanding with state-owned National Iranian Oil Company to develop Phase 11 of the South Pars field. The firm previously said it had a long-term interest in the project but saw short-term difficulties reaching a deal.

"In our opinion Total was already out (of the project before announcing the withdrawal) ... Total presently has no contract with us," Nozari said.

Iran had said it wanted Total to commit to the deal by mid-year but the French government, concerned about Iran's nuclear program, had urged Total not to invest.

In May, rival Royal Dutch Shell (RDSa.L) said it would pull out of developing another phase of the South Pars project.

Iran has dismissed the impact of Western firms quitting and says it has enough of a cash pile from windfall oil earnings to carry out projects on its own and says it will find other firms particularly from energy-hungry Asia to invest.

Iran has the world's second-biggest gas reserves after Russia but has been slow to develop them for exports because of factors including U.S. sanctions which have deterred investors and hindered the country's access to some technology.

(Reporting by Hashem Kalantari; Writing by Fredrik Dahl; Editing by Mike Peacock)