Iran’s energy sector has again proved to be a point of controversy as both Royal
Dutch Shell PLC (RDS.A, RDS.B)
and Spain’s Repsol YPF SA (REP) have
withdrawn from one of Iran’s largest natural gas projects after being pelted
with political pressure from the United States.
Shell and Repsol will no longer aid Iran in the development of phase 13 of
the country’s South Pars, the world’s biggest gas field, the
Financial Times reported. They did, however, leave
open the possibility of working with Iran to develop phases 20 and 21, but it
may be 10 years before those blocks are operational.
"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," the company said in a statement.
Neither company would comment on U.S. pressure.
Last month, Iran’s oil minister Gholam-Hossein Nozari gave the European oil
majors, including France’s Total SA (TOT),
until June 19 to finalize their deals or risk losing them to Gazprom OAO (OGZPY) or
Sinopec Shanghai Petrochemical Co. Ltd. (SHI).
Total has a memorandum of understanding with the state-owned NIOC to develop
phase 11 of the South Pars field. However, Total Chief Executive Christophe De Margerie warned yesterday (Monday) that it would
be difficult to reach an agreement in the short-term.
"In the short-term it will be difficult to find a win-win situation," Margerie told reporters in Doha. "We have told them we are
interested in the long-term."
Iran produces more than 20 million tons of petrochemical products each year,
and is the fourth largest oil producer in the world. The country controls about
5% of the global oil supply. It is estimated to have the world’s second largest
natural gas reserves after Russia.
However, the country has been ensnared by three sets of United Nations
sanctions related to its ongoing nuclear program. While Iran insists its nuclear
ambitions end at the civic level, the United States has spearheaded a campaign
to keep the country from becoming a nuclear power in the volatile Middle East.
Bankers around the world have cut back lending to satisfy the U.S.
government’s demands.
