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Total, Shell face ‘last chance’ for deals – Iran

Reuters: Total, Shell face “last chance” for deals – Iran

Wed Apr 16, 2008 11:14am BST

TEHRAN, April 16 (Reuters) – Iran said on Wednesday a June deadline would be the last chance for France’s Total (TOTF.PA: Quote, Profile, Research) and Royal Dutch Shell (RDSa.L: Quote, Profile, Research) to finalise deals on developing two major oil and gas assets in the Gulf.

After protracted talks, Iran urged Total and Shell in October to finalise their deals on the giant South Pars gas project by mid-2008 or lose the contracts, after the two oil firms had delayed investment due to soaring costs.

“The deadline we have given to Total and Shell is June and it is the last chance we are giving them,” Oil Minister Gholamhossein Nozari said, adding Tehran “will definitely make the final decision” after the deadline.

Another senior oil official earlier this week said negotiations with a number of Asian companies had already started and that they were likely to replace Total and Shell.

Tehran, facing mounting pressure from the West to abandon its nuclear ambitions, is seeking to attract foreign investors to help it develop its huge gas and oil reserves. But talks often take a long time to finalise.

Iran, with the world’s second largest gas reserves after Russia, had previously warned the French energy major not to bow to political pressure to steer clear of the Islamic Republic.

Western firms in particular have shown increasing reluctance to invest or expand operations in Iran because of its nuclear row with the West, which accuses Tehran of seeking atomic bombs despite Tehran’s denials.

Total Chief Executive Officer Christophe de Margerie said in February: “We have not burnt our bridges with Iran … We will find solutions to maintain our long-term presence.”

(Reporting by Parisa Hafezi, Writing by Zahra Hosseinian; Editing by James Jukwey)

© Reuters 2008 All rights reserved.

http://uk.reuters.com/article/oilRpt/idUKBLA63742820080416

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