Iran General NewsShell says signs Iran upstream deal

Shell says signs Iran upstream deal

-

Reuters: Royal Dutch Shell said it had signed a preliminary deal to develop a major Iranian gas field in conjunction with Spain’s Repsol, despite growing U.S. pressure not to invest in Iran. By Tom Bergin

LONDON (Reuters) – Royal Dutch Shell said it had signed a preliminary deal to develop a major Iranian gas field in conjunction with Spain’s Repsol , despite growing U.S. pressure not to invest in Iran.

A Shell spokeswoman said on Monday that Shell had signed a deal on the upstream, gas production, side of its ‘Persian LNG’ project which covers phase 13 and 14 of the South Pars gas field, confirming comments from an Iranian official on Sunday.

However, Shell said it was still a year away from a final decision on whether to proceed with the multi-billion dollar project. That hinges on another agreement, to build an 8 million tonnes per annum liquefied natural gas (LNG) terminal.

“We have signed an upstream service agreement as part of our work to assess the feasibility of the project,” a spokeswoman said. “Implementation of the upstream service agreement is subject to taking a final decision to proceed with the midstream LNG project.”

The United Nations has imposed limited sanctions on Iran to stop it enriching uranium and Washington is pushing for harsher sanctions against a nuclear programme it believes is aimed at building an atom bomb — an accusation Tehran rejects.

In the past year, Washington has increased pressure on non-U.S. companies not to invest in Iran and analysts believe it will be hard for oil companies to maintain operations in both Iran and the United States, where Shell and Repsol have fields.

Shell declined to say if it was subject to pressure and said its project was proceeding broadly as envisaged when an initial deal was agreed in 2004.

However, the timetable seems to have slipped. The company also said in February 2006 that a decision was only around a year away.

BUYBACKS

The spokeswoman said the upstream side of the project would be developed under a buyback type agreement.

Under such an agreement, Shell and Repsol would build the production facilities, which would be owned and operated by an Iranian company. Shell and Repsol would be paid back their costs plus a pre-agreed profit.

In the past, western companies have found the terms on such contracts unattractive, curbing investment interest.

Jonathan Wright at Citigroup said he expected an amended type of buyback contract to make the investment more attractive.

Nonetheless, investors think Shell and Repsol could agree to low margin deals as they seek to rebuild their reserves bases after years of poor performance at finding new fields.

On Sunday, Gholamhossein Nozari, head of state-owned National Iranian Oil Company (NIOC), told Iran’s student news agency ISNA that Iran had signed an initial deal worth $10 billion with Repsol and Shell to produce liquefied natural gas (LNG) from the South Pars gas field.

Latest news

Land Subsidence in Critical Conditions in Isfahan

Mehdi Toghyani, a member of the Iranian regime’s Majlis (parliament), pointed to the occurrence of land subsidence in various...

Iran’s Actual Inflation Rate Higher Than Official Stats

The state-run Donya-e-eqtesad newspaper, in a report analyzing the "general sentiment" regarding inflation in 2023, has stated that households...

Iranian Workers’ Monthly $136 Wages Can’t Cover $500 Expenses

The lives of a significant portion of the Iranian population are marked by uncertainty, largely because the Iranian economy...

Iranian Nurses Earn Twice Their Wages in Ride-Hailing Services

Reza Aryanpour, a member of the regime’s Majlis (parliament) Health and Treatment Commission, highlighted the growing trend of nurses...

Iran: Unprecedented Record of 152 Million Liters of Gasoline Consumption Per Day

On March 19, Iran set a new historical record in gasoline consumption with 152 million liters consumed in one...

Iran’s Youths Have Highest Unemployment Rate

The Iranian regime’s Eghtesad News website reported that data from the Statistical Center of Iran shows that the youth...

Must read

Canadian-sponsored human rights resolution against Iran passes

CBC News: Iran failed by one vote on Tuesday...

Facing sanctions, China defends Iran oil imports

AP: China defended its imports of Iranian oil but...

You might also likeRELATED
Recommended to you