LONDON The newly-appointed chairman of Royal Dutch/Shell group said on Thursday that international oil firms had no place expecting Iran to tailor its buyback energy investment formula to their needs.

"I think the important thing is that every country has to decide what are the arrangements that are best for themselves that are in line with the Constitution. They have to be politically acceptable within the country," Phil Watts told reporters after Shell executives held a news conference.

"I don't think it's our job as international oil companies to try to impose on a particular country what specific formula they should have," added Watts when asked if he found Iran's investment restrictions frustrating.

Under Iran's controversial buyback program foreign firms receive crude as compensation and profit in return for investing in projects under a formula that denies them a direct equity stake.

While international oil firms want sweeter terms, conservative politicians and officials in the Islamic Republic look at deeper foreign investment with suspicion and fear it could amount to selling out the country's most valuable resources to the West.

Foreign investment in oil is a politically sensitive issue in a country with complex struggles between reformers and conservatives.

Buybacks began in the mid-1990s in a bid to help the government skirt constitutional bans on foreign ventures and attract much-needed capital to revamp the ageing energy sector, badly damaged by the 1980s war against Iraq and U.S. sanctions.

Shell last year won an $800 million buyback deal to develop the Soroush and Norouz offshore fields with the National Iranian Oil Company (NIOC) and is competing for a project to develop the giant Bangestan field.

(Reuter)