Iran, Shell in Talks Over Oilfield Development, Crude Imports

Iran's National Petrochemical Company has signed an MoU with Shell on collaboration in the petrochemical industry
Iran, Shell in Talks Over Oilfield Development, Crude ImportsIran, Shell in Talks Over Oilfield Development, Crude Imports

The official pointed to the memorandum of understanding signed with the Anglo-Dutch company that was announced this month and added, "We have held talks on investment in the upstream petroleum sector and oilfield development is at the center of the talks."

Iran's National Petrochemical Company said in mid-October that an MoU had been signed with Shell on collaboration in the petrochemical industry, the country's second-largest sector after the oil and gas.

Zamaninia stressed that the name of the project cannot be disclosed yet but referred to negotiations between the Oil Ministry and Shell on boosting the rate of recovery from some oilfields.

Tehran wants to hold international tenders for dozens of oil and gas projects under a new model of contracts, entitled as Iran Petroleum Contract, and has asked foreign companies to submit documents for qualification.

But the official did not elucidate whether the unnamed oilfield discussed with Shell would be awarded outside the framework of multibillion-dollar tenders or under the terms and conditions outlined in the IPC.

In a similar scenario, Total S.A. signed an agreement to survey some of Iran's hydrocarbon deposits, but officials have asserted that the French oil and gas firm should bid in tenders alongside rival E&P companies for the development rights of Iranian oilfields.

  Oil, Condensate Exports

Zamaninia also said that Shell wants to sign a long-term deal to resume import of Iranian crude oil and gas condensates, an ultra light grade of oil.

Iran has been seeking new customers for its oil and condensate production as it strives to boost output and export levels to levels before the sanctions were imposed.

National Iranian Oil Company said this month that Tehran had sold its first cargo of condensate and crude oil to BP after the lifting of sanctions, adding that talks are underway to sign long-term contracts with BP and Shell.

Shell, which owed money to the NIOC for crude purchases before sanctions were imposed in 2012, was able to repay €1.7 billion ($1.9 billion), the state-owned oil company said in March.

Tehran and the six world powers (the five permanent members of the United Nations Security Council plus Germany) reached a historic agreement in July 2015 on limiting Iran's nuclear activities in exchange for sanctions relief.

Iran has ramped up its outbound crude shipments since the nuclear deal took effect in mid-January. It now exports around 2.8 million barrels of crude oil and condensates combined, almost on a par with its pre-sanctions highs.

Officials say between 600,000 to 700,000 barrels a day are sent to terminals in Europe. Iran is seeking to raise its crude and condensate production to more than 5 million bpd by 2020 from the present 3.8 million barrels per day.

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