Shell exits Iran gas deal

NUCLEAR FEARS: Royal Dutch Shell has pulled out of Phase 13 of the South Pars gas field after coming under pressure from the US. (Getty Images)

Oil major Royal Dutch Shell has pulled out of a planned gas project in Iran, after coming under pressure not to participate from US lawmakers who were concerned about Iran's nuclear programme.

A spokeswoman said on Saturday that the world's second-largest non government-controlled oil company by market capitalisation was pulling out of Phase 13 of the giant South Pars gas field but may yet join later stages of the field's development.

Shell, Spain's Repsol and the National Iranian Oil Company (NIOC) signed a Memorandum of Understanding in January 2002 to develop Phase 13 in a project to be known as Persian LNG.

At the time, Shell said deliveries of liquefied natural gas - gas cooled to liquid under pressure for transportation in special tankers - could begin in 2007.

However, UN sanctions on Iran related to its nuclear programme, which it claims is for power generation but which the US and European states believe is aimed at developing weapons, and criticisms of the deal from US politicians and investors, slowed progress.

Meanwhile Iran grew impatient and threatened Shell with eviction from the project if it did not commit formally.

The spokeswoman for the Anglo-Dutch company said:

"We have agreed the principal of substitution of alternative later phases for the PLNG project so that INOC can proceed with the immediate development of Phase 13."

She would not give a reason for the decision. Repsol was not available for comment.

Iran will now need to find new partners for the project. Media reports have suggested Russia's Gazprom, Indian Oil Corp and Chinese companies could join, as they are expected to be less susceptible to US political pressure, but the companies have limited experience of LNG. (Reuters)

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Shanghai Cooperation Organisation
Posted by Ivo Cerckel, Siquijor, Philippines on 11 May 2008 at 05:50 UAE time

Yes, we are told that UN sanctions on Iran are related to its nuclear programme.

No, these sanctions are not related to the Iranian Oil Bourse or to Iran no longer selling oil in dollars.

Yes, the UN Sanctions are related to Iran’s move to join the Shanghai Cooperation Organisation (SCO).

This move was reported on 24 March 2008 by the Russian news agency and the SCO Chief welcomes Iran's membership, said IranMania.com on 29 March 2008.

The SCO is an intergovernmental organisation which was founded on June 14, 2001 by leaders of the People's Republic of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Except for Uzbekistan, the other countries had been members of the Shanghai Five; after the inclusion of Uzbekistan in 2001, the members renamed the organization. Many have looked at this organisation as a counter to the North Atlantic Treaty Organisation (NATO). (3)

Four countries India, Mongolia, Pakistan and... Iran have observer status at the SCO.

As I said, Iran is now moving to join the SCO and the SCO Chief welcomes Iran's membership.

Even though US presidential candidate for the Republican party, John McCain, was still arguing on 10 february 2007 that we live in a multipolar system, we seem to be evolving towards a unipolar system whereby the SCO will be the only pole left.

"What is a uni-polar world?” asked Russian president Putin on 10 February 2007. “No matter how we beautify this term, it means one single centre of power, one single centre of force and one single master," he said.

The joining of Iran is at present leading to world tensions which are similar to these preceding the First World War.

At a certain moment, some people will be exasperated by the rising price of oil.

At that or another moment, others will be exasperated by the falling price of the dollar because it imports inflation. And that moment, it will be the Middle Eastern countries which peg their currencies to the dollar which will call the shots on the ailing dollar's future, says the Sunday Telegraph this morning. Ivo Cerckel

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