Repsol, Shell redraw Iran gas deal

NEW DEAL: A Repsol spokeswoman said US pressure did not influence the decision to renegotiate the company’s role in the South Pars gas field.

Spain's biggest oil group, Repsol, and British-Dutch peer Royal Dutch Shell are renegotiating their participation in a multi-billion dollar natural gas project in Iran but still want to take part, a Repsol internal source said Monday.

"Repsol and Shell are currently negotiating with the government a change" in their participation in the development of the project at Iran's huge South Pars gas field, she told newswire AFP.

The two firms want to exchange their participation in bloc 13 for a role in bloc 20 or 21 due to rising development costs, she added.

Washington has been putting political pressure on Western companies not to participate in projects in Iran because of suspicions that the Islamic regime is developing a nuclear arms programme.

But the Repsol spokeswoman said US pressure played no role in the decision to renegotiate.

"If this was the case we would not be in talks to exchange one Iranian bloc for another," she said.

Earlier Monday the Financial Times reported that the two firms had pulled out of the $10 billion project to develop bloc 13 of south Pars amid geopolitical uncertainty and rising costs.

The newspaper said the two firms could still participate in other blocs.

Blocs 20 and 21 will take at least a decade before they become operational while bloc 13 is expected to be developed much sooner, the newspaper said.

The US government told Royal Dutch Shell and Repsol, which both have major interests in the US, in January 2007 that their project in Iran would probably infringe US law, Spanish business daily Expansion reported earlier this month.

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