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TEHRAN, April 26 (Reuters) - Iran has given Royal Dutch Shell (RDSa.L) and Repsol (REP.MC) one week to decide on their involvement in the offshore South Pars natural gas field, the semi-official Mehr news agency reported on Monday.
Iran says both Anglo-Dutch Shell and Spain’s Repsol have procrastinated on finalising their involvement in the field, the world’s largest reservoir of gas. It has set similar deadlines in the past as a way of pressuring foreign investors.
Ali Vakili, managing director of the Pars Oil and Gas Company (POGC), was also quoted as saying a deadline for Turkey to clarify its involvement in developing three phases of South Pars had passed.
“We will not delay the development of South Pars phases waiting for foreign companies,” Vakili told Mehr.
Many foreign countries are investing in the field, which Iran shares with Qatar, but U.S. and U.N. sanctions have caused Western companies to treat Iran with caution, sometimes to the benefit of operators from other parts of the world.
China’s National Petroleum Corporation (CNPC) clinched a $4.7 billion deal to develop part of South Pars, supplanting Total (TOTF.PA) as lead partner in the project after the French firm delayed its investment decision under political pressure.
Vakili told the Iranian Oil Ministry website SHANA that POGC planned to issue bonds worth 3 billion euros and rial-denominated bonds worth around $3 billion to help finance development at South Pars [ID:nDAH630892].
Iran has the world’s second largest gas reserves but has no major net exports, partly because sanctions have deterred investment by Western firms.
Repsol and Shell signed a service contract for the Persian LNG project in January 2007, setting out the conditions for exploration and development operations in Phases 13 and 14 of South Pars. The project covers development of production and exports of liquefied natural gas from a part of the field.
In 2008, Shell delayed decisions on multi-billion dollar investments in Iranian LNG plans due to political tension.
In April last year, Iran gave Shell and Repsol until the following month to clarify their involvement in South Pars. In June, Iran said the two firms had offered a new proposal for initial production at South Pars phases 13 and 14.
LNG is gas cooled to liquid under pressure for transportation in special tankers. (Reporting by Hashem Kalantari and Hossein Jaseb; Writing by Robin Pomeroy; editing by Amanda Cooper)