Iran General NewsIran 'negotiating swap of Repsol, Shell gas projects'

Iran ‘negotiating swap of Repsol, Shell gas projects’

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ImageAFP: Iran is negotiating with Spanish and British-Dutch energy giants to switch their gas exploration blocs with others due for later development, the oil minister was quoted on Thursday as saying.

ImageTEHRAN (AFP) — Iran is negotiating with Spanish and British-Dutch energy giants to switch their gas exploration blocs with others due for later development, the oil minister was quoted on Thursday as saying.

The comments by Oil Minister Gholam Hossein Nozari came after sources in Spain's Repsol said the company wanted to swap its phase in the offshore South Pars field, Iran's largest gas field, owing to rising development costs.

"The border areas phases 13 and 14 of the South Pars gas field were allocated to (British-Dutch) Shell and Repsol," Nozari was quoted as saying by the Hamshahri newspaper.

"But instead of these two, we are examining giving them other phases. Phase 15, 16, 20 and 21 are being negotiated with Shell and Repsol," he said.

According to the official IRNA news agency, Nozari said on Wednesday "we are negotiating with these companies to allocate other phases of the field's development, where a delay does not harm the reservoir."

"We are pursuing similar talks with Total," he added, without giving further details.

Under a deal agreed in 2006, France's Total is to exploit phase 11 of the South Pars field and to produce liquefied natural gas (LNG) for export and build a liquefaction plant but the deal is held up by a price dispute.

Iranian officials have urged the company to take a decision by June in order to avoid a replacement by other companies in the gas deal. However they later denied such an ultimatum.

A Repsol source said earlier this month that two firms sought to exchange their participation in bloc 13 for a role in bloc 20 or 21 due to rising development costs.

Blocs 20 and 21 will take at least a decade before they become operational while bloc 13 is expected to be developed much sooner, reports said.

In January 2007, the US government reportedly told Royal Dutch Shell and Repsol, which both have major interests in the United States, that their project in Iran would probably infringe US law.

Iran has the world's second-largest reserves of natural gas. The South Pars field in the Gulf has around 500 trillion cubic feet (14 trillion cubic metres) of gas, which represents about eight percent of world reserves.

The development of the giant offshore field has been delayed amid a lack of investment in a country faced with severe gas needs of its own in winter at the same time as planning ambitious gas export projects to Asia and Europe.

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