Shell, Repsol YPF may face US probe over South Pars deal

Repsol YFP SA and Royal Dutch Shell PLC may come under investigation by US authorities for an agreement the companies signed this week with National Iranian Oil Co.

Feb 2nd, 2007

Eric Watkins
Senior Correspondent

LOS ANGELES, Feb. 2 -- Repsol YFP SA and Royal Dutch Shell PLC may come under investigation by US authorities for an agreement the companies signed this week with National Iranian Oil Co.

"If there's an investment greater than a certain amount, as specified in US law, then our lawyers take a look at it and the policymakers take a look at it, and see if there's any further steps that we, as a government, take," said US Department of State spokesman Sean McCormack.

On Jan. 30, Iran reported the completion of a preliminary $10 billion deal with Repsol YPF and Shell to produce 16 million tonnes/year of LNG from Iran's South Pars field (OGJ Online, Jan. 30, 2007). Shell and Repsol YPF would each have 25% of the project, with NIOC holding 50%.

McCormack did not discuss any sanctions Repsol YPF and Shell might face if they went through with their agreement but he suggested that a final decision on whether to proceed is expected in first quarter 2008.

Contact Eric Watkins at hippalus@yahoo.com.

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