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Yahoo Business News: Iran Officials Say Shell Still After Key Oil Field Deal ( 11 May 05


Wednesday May 11, 12:39 AM


LONDON (Dow Jones)--Only days after appearing to bow to intense U.S. pressure to withdraw from their reported talks with Iran on a petrochemicals deal, executives from Royal Dutch/Shell Group (RD,SC) are due in Tehran - this time to negotiate a role in one of the country's largest oil developments, senior Iranian oil officials said Tuesday.


The officials said their upcoming talks with the Anglo-Dutch oil major will include its possible participation in the giant onshore Yadavaran oil structure.


"Shell has made it very clear it wants to participate alongside our Chinese partners in Yadavaran and that is still under discussion," an Iranian executive familiar with the talks told Dow Jones Newswires by telephone.


Another Iranian official said the talks between Iranian oil officials and Shell are due to take place "within the next couple of weeks."


A spokesman for Shell in London declined to comment on whether such a meeting would take place.


However, Shell's interest in gaining a foothold in Yadavaran, which has the potential to pump 300,000 barrels a day of crude oil, is well-known. Last year the company was amongst several oil majors which bid for a 60% stake in the oil field.


Since then Iran has signed a memorandum of understanding with China's Sinopec for the field. But Iranians involved in the talks say the presence of a European partner to help develop the project in southwestern Iran is still welcome.


Late last week, Royal Dutch and BASF AG (BF) sold Basell, a joint venture which makes polyolefins, for EUR4.4 billion, including debt, to New York-based Access Industries together with The Chatterjee Group (CJG.YY).


A person familiar with the talks said Shell and BASF had bowed to weeks of economic pressure from the U.S., in spite of an attractive offer from the National Iranian Petrochemical Co.(NPC.TH).


Neither Shell nor BASF ever acknowledged they were in talks with Iran.


The Iranian official spoken to by Dow Jones Newswires said the two companies were influenced by the U.S. over the Basell sale but this is unlikely to have a negative impact on Shell's oil operations in Iran.


"There is no animosity between either party. It is business as usual," the official said.


The Basell decision came days after talks between Iran and Europe over a compromise on the Islamic nation's nuclear ambitions ended without agreement.


Since then senior Iranian politicians have said Iran will pursue all legal areas of nuclear technology, including uranium enrichment.


The U.S. believes Iran is aggressively pursuing the development of nuclear weapons and appears to be willing to flex its political and economic muscles in a bid to halt any such process.


Under the U.S.-imposed Iran and Libya's Sanctions Act of 1996, foreign firms with U.S. assets are already limited in participating in Iran's hydrocarbons business.


Until recently, Washington appears to have turned a blind eye on most such deals. In 1999, Shell signed a $1.1 billion contract to develop Iran's offshore Nowruz and Soroosh oil fields. -By Sally Jones, Dow Jones Newswires; 44-207-842 9347; 


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