Reuters: The chief executive of Royal Dutch Shell Plc said rising industry costs and negotiation on deal terms had delayed a planned multi-billion dollar investment in Iran, rather than the threat of sanctions. “It is primarily project reasons … are the reasons for delay,” Jeroen van der Veer told a conference call with reporters. By Tom Bergin
LONDON, July 26 (Reuters) – The chief executive of Royal Dutch Shell Plc said rising industry costs and negotiation on deal terms had delayed a planned multi-billion dollar investment in Iran, rather than the threat of sanctions. “It is primarily project reasons … are the reasons for delay,” Jeroen van der Veer told a conference call with reporters.
Shell has been in talks for years about building Iran’s first liquefied natural gas (LNG) project, which would be fed by the giant South Pars gas field.
Iran faces possible UN sanctions on investment because of its nuclear programme, which Washington says is a cover for the search for an atomic bomb. It has already been subjected to limited UN sanctions and U.S. sanctions.
Van der Veer said Shell would consider the political environment when it had agreed a viable technical plan — made more difficult by the U.S. sanctions which preclude the use of products or services from U.S. oil service corporations.
Shell also needs to agree financial terms with Tehran. Iran has in the past offered foreign companies unappealing contracts.
“We have to realise that we better make sure we make the economics of such a project right,” the CEO added.
The Financial Times newspaper reported on Thursday that U.S. shareholders had criticised Shell for its investment plans in Iran.
LNG is gas cooled to liquid so it can be transported economically in ships over long distances.
