Shell Ready to Settle $2.3b Unpaid Debts

Shell Ready to Settle $2.3b Unpaid DebtsShell Ready to Settle $2.3b Unpaid Debts

The National Iranian Oil Company and Royal Dutch Shell plc reached a final agreement on how to settle the Anglo–Dutch multinational oil and gas company 's $2.3 billion unpaid dues, deputy for international affairs in the National Iranian Oil Company said on Monday.

"As soon as unpaid debts are repaid, oil export to Shell will be resumed," Seyyed Mohsen Qamsari told Mehr News Agency.

Referring to the prolonged negotiations between NIOC and Shell's managing directors, the official added that the two sides agreed on the details of the payment terms and ambiguities were removed.

Qamsari noted that as soon as sanctions are lifted, the Anglo–Dutch giant will clear all its debts. Nonetheless, the official did not elaborate further.

Edward Daniels, executive vice president for commercial affairs at Shell, has recently confirmed that Shell's unpaid dues will be repaid once sanctions are terminated.

Nureddin Wefati, head of Middle East and North Africa for media relations of Shell, had already said, "In spite of the fact that we cannot settle our unpaid dues, amounting to $2.3 billion, we are exploring the potential role we can play in developing Iran's energy sector. In addition, we are interested in obtaining information about Iran's new financial conditions, as well as the effect of the signed deal on repaying our dues."

On the critical issue of crude purchase resumption from Iran, Wefati said, "Shell has a long history in buying oil from NIOC and it will resume negotiations with Iranian officials, provided sanctions are lifted."

Shell is a global group of energy and petrochemical companies headquartered in The Hague, the Netherlands.

Concurrent with British Foreign Secretary Philip Hammond's trip to Tehran to formally reopen London's Embassy in August, the new round of oil negotiations started and Hammond acted as an intermediary between the two sides. Furthermore, the British official guaranteed that the dues would definitely be settled in the post-sanctions era.

  Shell's Reentry

Shell was active in Iran before the US and EU introduced sanctions against the Persian Gulf country to limit its nuclear program. The company had signed a contract to develop Soroush and Norouz oilfields in the Persian Gulf and also help develop Phase 11 of South Pars, the country's biggest gas field, but it halted operations in Iran for fear of violating the sanctions. Oil officials recently discussed grounds for cooperation in the post-sanctions period with oil and gas major Royal Dutch Shell in a meeting in the Netherlands.

In September, Iranian authorities said plans were underway to commercialize gas stations in Iran, with Shell said to be shown the green light to build a total of 200 new gas stations under their brand name nationwide, but officials were quick to rule out any such agreement. Low oil prices have taken their toll on Shell, as the company last week reported a loss of $7.4 billion in profit in the third quarter, in contrast to $4.5 billion in profits in the same quarter a year earlier.

Due to sanctions and the consequent money transaction limitations imposed by foreign banks, Iran's oil exports have been cut by more than half to around 1.2 million barrels per day from the  pre-sanctions level of 2.5 million bpd.