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Shell and Repsol drop Iran gas project


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Financial Times: Shell and Repsol drop Iran gas project

By Anna Fifield in Tehran and Javier Blas in London

Published: May 11 2008 19:00 | Last updated: May 11 2008 19:00

Royal Dutch Shell and Spain’s Repsol have pulled out of one of Iran’s biggest gas projects, dealing a blow to Tehran’s attempts to expand its energy exports in the face of US and international sanctions.

The pair will withdraw from the $10bn-plus development of phase 13 of South Pars, the world’s largest gas field. They say they could still participate in other phases.

Their decision is made as Washington intensifies pressure on international companies to stop operating in Iran, part of a campaign to isolate Tehran over its refusal to halt its nuclear programme.

Neither Shell nor Repsol would comment on the US pressure. People close to the companies cited geopolitical uncertainty and spiralling costs as the reasons behind the decision.

“Shell has agreed the principle of substitution of alternative later phases for the Persian LNG project so that [the National Iranian Oil Company] can proceed with the immediate development of phase 13,” Shell said.

Shell and Repsol last year signed a preliminary deal with the NIOC by which the two European companies would help develop phases 13 and 14 of South Pars, contributing the gas to the Persian liquefied natural gas project. They are likely to continue to act in a technical advisory role on phase 13.

Iran had been pushing Shell and Repsol to finalise the deal because phase 13 is on the South Pars border with Qatar, which is already pumping gas from its side. Iran’s oil minister last month gave the pair, with Total of France, which is involved in phases 11 and 12, a June deadline for finalising their respective contracts.

Russia’s Gazprom, Sinopec of China, and the Indian national oil company were all keen to take their place, he warned.

Shell said on Sunday it would pull out of phase 13 because it could not meet the Iranian requirements to develop the block quickly.

Pars Oil and Gas Company and NIOC both declined to comment.

Shell and Repsol are understood to be considering developing phases 20 and 21 of South Pars instead, but these blocks would take at least a decade to become operational.

The whole project hangs in the balance. “We have not yet taken a decision as to whether to proceed with the Persian LNG project,” Shell said. and its also non-profit sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

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