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Shell Underlines New Opening in Tehran Ties
Shell Underlines New Opening in Tehran Ties

Shell Underlines New Opening in Tehran Ties

Shell Underlines New Opening in Tehran Ties

The agreement this week between Royal Dutch Shell and National Iranian Oil Company has opened a new chapter in the company's relations with Iran after the lifting of sanctions, Hans Nijkamp, Shell's head of the department of Iran affairs said.

He made the statement after signing three memoranda of understanding in Tehran on Wednesday which allows the Anglo-Dutch company to carry out studies on the South Azadegan and Yadavaran oilfields as well as Kish Gas Field, Shana reported.

South Azadegan and Yadavaran fields both straddle Iran's border with Iraq and the gas field is situated in the Persian Gulf.

“During years of sanctions, Iran showed an outstanding performance and its oil industry averted the crisis. The global oil market was looking forward to Iran’s return to the international stage,” Nijkamp noted.

Iran’s introduction of the new framework for oil contracts, officially known as Iran Petroleum Contract, is a step toward "a win-win trade atmosphere and Shell is seeking more effective ways to cooperate with NIOC," he added.

IPC is an upgrade to the buyback contract model that was used in Iran's petroleum industry over the past two decades. IPC offers more attractive terms and conditions, including higher rewards for risky projects.

Underscoring the developments in Iran's petroleum industry, especially the rise in natural gas output over the past three years, Nijkamp said Iran not only has managed to meet domestic demand but also reasserted its position in the international market. Nijkamp said Shell has ample experience in oil and gas development projects, including in the Middle East, and is willing to provide NIOC with modern technology.

“When we embark on an energy project anywhere, we seek to establish long-term collaboration," he said.   

Iran’s output from the North Azadegan and South Azadegan developments is about 120,000 barrels per day, according to Wood Mackenzie Ltd. Majnoon, the Iraqi part of Azadegan, is operated by Shell and produces more than 210,000 barrels a day, according to Iraq’s Oil Ministry.

Yadavaran Oilfield, in Khuzestan Province, is one of NIOC's recent discoveries, which is estimated to have reserves of up to 17 billion barrels of oil, with 3 billion barrels considered to be recoverable.

Discovered in 2006, Kish Gas Field is a giant field close to island by the same name in the Persian Gulf.

International oil companies reestablished contacts with Tehran after the implementation of a nuclear deal between Iran and the six world powers in January.

  Support for Nuclear Deal

London offers firm support to the sound implementation of the JCPOA and calls for expansion of economic relations with Iran, UK ambassador to Tehran, Nicholas Hopton, said after signing of the agreement with Shell on Wednesday, IRNA reported.

“My stance is the same as the UK government and we strongly support the implementation of the nuclear deal and expansion of economic cooperation with Iran,” he said.

“I attended the (signing) ceremony to strongly underline that I do support expansion of economic cooperation with Tehran and also send a similar message on expansion of economic cooperation between Iran and the Netherlands,” Hopton added.

He expressed hope that elimination of banking and financial restrictions would lead to the growth of Iran's trade with the outside world.

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