Sanctions prevent Shell settling its debt to Iran

Business Materials 4 June 2015 12:13 (UTC +04:00)

Baku, Azerbaijan, June 4

By Umid Niayesh - Trend:

International sanctions against Iran over its disputed nuclear program have prevented Royal Dutch Shell company from settling its $2.3 billion of debt to Tehran, Nureddin Wefati, head of Media Relations for Middle East and North Africa of the company told Trend June 4.

The company is discussing with Tehran repayment of the outstanding debt as the energy giant eyes new opportunities in the country.

Shell's Chief Executive Ben van Beurden met with Iran's Minister of Oil Bijan Namdar Zanganeh on June 3 on the sidelines of an OPEC seminar in Vienna to "give assurance that payments will be made as soon as they can be made."

"We can confirm our outstanding obligation to National Iranian Oil Company (NIOC) that emerged as a result of the international sanctions regime," Wefati underlined, adding the company is unable to settle the payable position as a result of applicable sanctions that require authorization to make the payment.

He further said that the company is engaging with all relevant stakeholders regarding the issue and working on the speedy payment in a compliant and transparent manner.

In 2013, the British government prevented Shell from repaying the debt that it owes for the crude oil it bought from the NIOC.

Shell was reported at the time to be trying to pay the debt in kind with grains or pharmaceuticals, which are not barred by US and European sanctions, but the UK government nevertheless blocked it.

Wefati also emphasized the giant energy company's interest to return to Iran saying Shell reviews its growth portfolio on a regular basis and does not exclude any country that is open to foreign investment.

"Iran has significant oil and gas resources. Should future sanctions relief make that possible, we would be interested in exploring with the government of Iran what role Shell can play in developing its energy potential," he underlined.

Wefati further said that one important factor determining the company's interest - besides sanctions relief - will be what the new fiscal regime for the energy sector will look like.

While responding to a question whether the company has negotiated with Tehran on any specific project, Wefati said that as per the sanctions, Shell is not in a position to engage in commercial discussions relating to future projects or investments.

It should be noted that Iran and the P5+1 (the US, UK, France, Russia, China, and Germany) reached a nuclear framework agreement on April 2 that raised hopes for achieving a comprehensive nuclear deal by June 30 and lifting of international economic sanctions on Iran.

By holding 157 billion barrels of recoverable crude oil reserve, Iran possesses the world's fourth largest crude oil reserve.

Iran's crude oil export was above 2.2 million barrels per day (mb/d) in 2011, but the western sanctions imposed in mid-2012 have pushed Iranian oil export volume to around one mb/d in 2013.

After achieving an interim nuclear agreement in November 2013, Iran's oil export increased steadily to around 1.11 mb/d, however, the volume reportedly decreased slightly during recent months again.

Edited by CN

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