Last week, French oil company Total S.A. (NYSE:TOT) bought a 50% stake in a project developing the huge offshore South Pars natural gas field.

In this clip from Industry Focus: Energy, Motley Fool analysts Sean O'Reilly and Taylor Muckerman explain how Total is funding this project, and why it's such a smart move for the company.

A full transcript follows the video.

This podcast was recorded on Nov. 10, 2016.

Sean O'Reilly: I wanted to touch very briefly on the news that French oil giant Total is now one of the first Western businesses and/or oil companies to invest in the Islamic Republic of Iran. Where is Crowe? We need Tyler Crowe when we're talking about Total.

Taylor Muckerman: We do, we need Tyler Crowe. Why is it a Western company? It's based in the Eastern hemisphere, isn't it?

O'Reilly: No, Europe and North America are considered the Western hemisphere.

Muckerman: OK. It is?

O'Reilly: You didn't pay attention in geography class?

Muckerman: Dude, Iran... eh, whatever.

O'Reilly: Geography. No, Europe is Western.

Muckerman: Yeah. OK. Got it.

O'Reilly: You're just giving me this look, like...

Muckerman: [laughs]

O'Reilly: So, I was actually very surprised. You would think -- in fact, all the articles I read, they were talking about how everybody thought they would wait to make a final decision on this deal until after the U.S. election, because Mr. Trump has not been super-keen on the lifted sanctions.

Muckerman: This is true; he's not the biggest fan.

O'Reilly: French oil company Total says they will avoid U.S. sanctions on Iran by using its own euro-denominated cash to finance the deal. Long story short, they have agreed to develop -- gosh, I'm actually surprised that it's this many phases -- the 11th phase of the giant offshore gas South Pars field over the next 20 years. Total is going to take a 50% stake, China National Petroleum Corp is taking 30%, and then the Iranian government is going to take the other 20%. Iran, of course, is doing this for the technology and expertise required to develop this puppy. Where is Crowe? We should have called him. I dropped the ball, here. What did you think about this, when you saw this?

Muckerman: It's pretty interesting. You knew it was going to happen sooner or later. Not only are they working with the Iranians, but also the Chinese.

O'Reilly: Everybody's in!

Muckerman: That's really going to anger Donald Trump. I think it's a pretty smart move. They have the ability to use non-dollar-denominated cash.

O'Reilly: It's also interesting that they're actually going to be paid for this investment in gas. They're not being sent money. That's interesting. [laughs]

Muckerman: That is interesting. I don't remember a deal where I've seen that.

O'Reilly: "I want you to pay me in natural gas." [laughs]

Muckerman: I guess they're betting on the fact that prices will stay -- well, at least in the near term, they might as well just take the gas and sell it on their own, or turn it into feedstock. Something, I don't know. But, tons of potential there, especially because a lot of these resources have been untapped for the last several years, so it's a market that they really didn't have to go out and discover anything. But I'm sure discussions took quite a while to arrive at this final destination.

O'Reilly: They said it was the 11th phase. That implies...

Muckerman: Yeah, the field has been producing. But now you bring in a global integrated company, a company that has been talking more and more about renewables, but now they're diving back headfirst into natural gas.

Sean O'Reilly has no position in any stocks mentioned. Taylor Muckerman has no position in any stocks mentioned. The Motley Fool recommends Total. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.