Total, Shell urged to finalize SP contracts by June ’08

October 18, 2007

TEHRAN (PIN) – Pars Oil and Gas Co. (POGC) managing director reiterated that Iran was determining to take optimal use of domestic potentials, setting the June 2008 deadline for France’s Total and Royal Dutch Shell to finalize contracts on development of South Pars (SP) field.

Ali Vakili made the statement in a news conference, urging the French giant Total to make final investment decision (FID) on SP Phase 11 by the date.
He warned that the deadline would not be extended and scores of companies were on standby as they had voiced their willingness to develop Phase 11 of South Pars field.
The POGC head also underlined that Shell had to finalize the contract on development of SP phases 13-14 within the period.
Petroleum Ministry’s caretaker warned if the contract of Pars LNG project were not finalized with Total, Iran would implement the project by itself.
Gholamhossein Nozari said the Pars LNG contract had not been yet finalized as Iran had not accepted the French company’s FID, however adding Total had not voiced its unwillingness to make investment in the project.
“Total, in its proposed FID, has announced that it will invest some 11.2 billion dollars in Phase 11 and Iran has dismissed the amount as unacceptable,” said the top official.
He ruled out the news that Total had reached an impasse in Iran’s Pars LNG project.
“Total is keen to implement the project,” said the acting oil minister, adding Iran had proposed the French giant to divide the project into smaller packages in a bid to slash costs.
Nozari, however, reiterated that Iran would not wait for any country for the implementation of domestic projects.
Manager of Total Christophe de Margerie said the giant energy group would press on with talks on Pars LNG, Iran’s first liquefied natural gas export terminal, a project which requires a $15 billion investment, adding Total would look at the political situation only once a deal is ready.
As global demand for oil and gas rises, consumer countries cannot afford to blacklist producing countries on geopolitical grounds, the head of Total, which is present in Iran and Myanmar, said.
Vakili said there was no limitation for Russia’s presence in South Pars (SP) projects, Mehr News Agency (MNA) reported.
If the Iranian party and Gazprom reached an agreement, the Russian company would develop SP phases 2-3, he added.
He noted that no country even the U.S faced restraint in developing the field.
“None of the foreign companies has pulled out of projects,” the official said.