UPDATE 1-Total CEO says boss aware of Iran lobbying-report

(adds background, more details, OECD bribery definition)

By Marie Maitre and Thierry Leveque

PARIS, March 27 (Reuters) - The head of French oil firm Total told bribery investigators his boss Thierry Desmarest, who now chairs the company, knew about the use of lobbyists to clinch a major deal in Iran, a newspaper reported on Tuesday.

Chief Executive Christophe de Margerie, who has been targeted in a corruption probe into the 1997 South Pars gas deal, said he had told Desmarest Total needed "help" to win the multi-billion dollar deal, France's L'Est Republicain reported.

The newspaper cited leaked extracts from what it described as a transcript of de Margerie's testimony to an investigating judge during a 36-hour detention for questioning last week.

Total declined to comment on the report.

"I can't comment on this. We don't know if this is true. These documents should not have been made public. They are confidential," a Total spokesman said.

Desmarest was both chairman and chief executive until last month when the roles were split. In 1997, De Margerie was in charge of Middle East operations, reporting to Desmarest, who remains his boss as non-executive chairman.

Total has denied any wrongdoing on the Iran gas deal and in Iraq where French investigators are examining separate claims that it infringed the United Nations oil-for-food programme. De Margerie is under formal investigation in both cases.

Analysts have said the Iran investigation -- coupled with the similar probe on alleged sanctions-busting in Iraq -- has so far failed to trouble investors, who believe Desmarest could return to his old CEO job if de Margerie were charged or prevented from carrying out his duties effectively.

Tuesday's alleged leak of testimony marks the first time Desmarest's name has been drawn into the increasing public fallout from the deal, which was signed at a time of tensions with the United States over foreign oil investments in Iran.

"When I decided in 1995/1996 to use a lobby contract, I informed my line superior, Mr. Thierry Desmarest," De Margerie told investigators, according to the newspaper extracts.

"I told him that in the context of the $4 billion contract, if we wanted to stand a chance to progress, in a difficult political environment in Iran and the United States, we needed to be helped."

LOBBYING CONTRACT

Desmarest flew to Tehran to sign the $2 billion deal for the first phase of South Pars on September 28, 1997, snatching the biggest oil deal with Iran since the Islamic Revolution in defiance of U.S. efforts to punish oil firms investing there.