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UpstreamOnline: Warning for Total and Shell

Iran has issued an apparent ultimatum to Total and Shell to arrive at decisions on two big liquefied natural gas projects by mid-2008 or face losing the schemes, writes Vahe Petrossian.

If final investment decisions by the two are not made by June 2008, Iran will go ahead with the projects without them, Pars Oil&Gas Company (POGC) head Ali Vakili said.

A similar warning was issued by acting oil minister Gholamhossain Nozari.

The ultimatums reflect Iranian anger at delays by the companies in agreeing deals in the face of political pressure from Western governments and soaring costs.

The Iranian side may also believe it needs to be more aggressive if it is to prevent the effective shelving of the projects for the foreseeable future.

Vakili said: “If we don’t reach an agreement we will not extend the time for talks.”

Total’s integrated project is known as Phase 11-Pars LNG; the proposal by a partnership of Shell and Repsol YPF is known as Phases 13&14-Persian LNG.

Both companies blame soaring costs for delays and hint that political factors would have to be considered once financial issues were settled.
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18 October 2007 23:01 GMT  | last updated: 18 October 2007 23:01 GMT

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