Shell seals oil and gas agreements with Iran

Business Materials 7 December 2016 16:25 (UTC +04:00)

Baku, Azerbaijan, Dec. 7

By Emil Ilgar – Trend:

Royal Dutch Shell signed three heads of agreement (HOA) with Iran Dec.7, Shana news agency reported.

According to the previous reports, Total also would participate in the deal, but Reuters quoted an Iranian official as saying that “Total, which last month signed the first deal by a Western energy firm since sanctions were lifted, will start talks about new oil and gas projects but will not be signing any deals on Wednesday”.

Shana news agency didn’t mention Total in its report.

Shell signed HOA with Iran to study the Islamic Republic's Kish gas field as well as South Azadegan and Yadavaran oil fields.

Some 12 wells have been drilled in the Kish field, which contains about 1 trillion cubic meters of gas reserves.

Iran plans to produce 140 million cubic meters per day (mcm/d) from this field in three stages.

Before, Total and Iran signed a HOA on South Pars gas field’s phase 11. Total also signed a confidentiality agreement with Iran to study the South Azadegan oil field.

Shell and National Iranian Oil Company (NIOC) signed HOA on South Azadegan’s second phase, aimed to produce 300-320 thousand barrels of crude oil per day.

The sides also signed a HOA on Yadavaran oil field, aimed to produce 300,000 barrels of oil per day in three stages.

The total needed on investment for developing these three fields (South Azadegan, Yadavaran and Kish) is estimated about $10-12 billion.

Iran is expected to sign agreements on the mentioned fields, based on new designed Iran Petroleum Contract model in 2017.

Iran has introduced 49 oil and gas projects for foreign companies based on new contract model. The country needs $100 billion investment in upstream secor by 2021, of which 80 percent is expected to be put by foreigners.