Shell and Iran sign deal to develop future oil and gas projects

Royal Dutch Shell has entered into a provisional agreement to develop oil and gas fields in Iran.

It is the company's first deal in Iran after the sanctions were lifted.

The Anglo-Dutch company signed the memorandum of understanding (MoU) with the government-owned National Iranian Oil Company.

A company spokesperson said that the deal would ‘further explore areas of potential cooperation’, reported Reuters.

The non-binding agreement highlights that big oil companies are willing to do business with Iran in spite of the President-Elect Donald Trump’s threat to terminate the nuclear deal between US and Iran after assuming the office.

An Iranian official from the oil ministry previously stated that Shell would sign three MoUs with Iran to develop the South Azadegan, Yadavaran oil fields and the Kish gas field.

Shell spokesperson declined to divulge more details about the agreement.

Last month, French company Total signed a deal with Iranian counterparts, the first western oil and gas company to do so after the sanctions were lifted.

Wood Mackenzie Middle East research analyst Homayoun Falakshahi was quoted by the news agency as saying: “These preliminary agreements could mark a strong sign of confidence towards the sustainability of the nuclear deal.”

“These preliminary agreements come at the right time for President (Hassan) Rouhani, who can leverage on the nuclear deal bearing fruits for Iran's economy despite Trump's election.”

Iran is the third largest producer among OPEC countries and is scheduled to organise a tender to develop its oil and gas fields next year after years of underinvestment.

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Image: Iran oil and gas fields. Photo: Courtesy of Behrangaref / Wikipedia