Repsol, Shell: Iran Gas Project

The biggest Latin American oil and gas company, Repsol, and third biggest oil enterprise, British-Dutch Royal Dutch Shell are renegotiating their participation in a multi-billion dollar natural gas project in Iran but still want to take part.

The two firms want to exchange their participation in bloc 13 for a role in bloc 20 or 21 due to rising development costs.
Washington has been putting political pressure on Western companies not to participate in projects in Iran because of suspicions that the Islamic regime is developing a nuclear arms programme.

But the Repsol spokeswoman said US pressure played no role in the decision to renegotiate.

Earlier Monday the Financial Times reported that the two firms had pulled out of the 10-billion-dollar (6.5-billion-euro) project to develop bloc 13 of south Pars amid
geopolitical uncertainty and rising 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, the newspaper said.

The US government told Royal Dutch Shell and Repsol, which both have major interests in the United States, in January 2007 that their project in Iran would probably infringe US law, Spanish business daily Expansion reported earlier this month.