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Dow Jones Newswire: Shell Mulls Iran Deal Despite U.S. Pressure

LONDON -(Dow Jones)- Royal Dutch Shell PLC (RDSB.LN) is still studying the possibility of investing in a key natural gas project in Iran, Jeroen van der Veer said Thursday.

The statement comes despite pressure in the U.S. for the oil company to scrap the plans, including a letter from pension funds warning Shell against the risks of Iran.

Speaking at an earnings press conference, van der Veer said Shell would have to “take political considerations into account” when it gets closer to a decision on the matter.

In the meantime, he said the company’s “architects will continue to do their work” to assess the prospective investment.

The California Public Employees’ Retirement System and other U.S. pension funds Tuesday urged Shell and three other companies to take “steps to minimize the risk of investment in Iran.” The fund added that pending U.S. state legislation is increasingly raising the prospect of funds “having to divest investments in foreign companies that do business in Iran.”

Shell and Spain’s Repsol YPF (REP) in January signed a preliminary $10 billion agreement with the Iranian government to develop two phases of the huge South Pars gas field.

Van der Veer reiterated that Shell will take at least a year to reach a final investment decision on the project. When it revealed the tentative agreement seven months ago, the company said it would take a year or more to finalize the deal.

Without acknowledging any delay in the decision-making process, the chief executive said finalizing a deal was taking time not just because of politics but also because of the economics and complexity of the project.

-By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; [email protected]

(END) Dow Jones Newswires

07-26-07 0719ET

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