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Royal Dutch Shell plc: New Condition in Iran Agreement

Published By: Eunice Gettys on January 17, 2017 11:52 am EST

Coming ahead of Western sanctions being uplifted over its nuclear program, Iran is in full zest to boost its production at pre-sanction levels. Not just the oil rich country but even the Big Oil companies are aggressively seeking to pave ways in the lucrative fields of Iran.

With Total SA (ADR) (NYSE:TOT) taking the lead via the South Pars project, followed by Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Eni SpA (ADR) (NYSE:E), and BP plc (ADR) (NYSE:BP), Iranian news agency has reported that the country is aiming to exploit the rivalry between these companies. 

The OPEC member seeks to make this move, making it mandatory to include at least one Iranian crude oil firm in every consortium of oil & gas companies for the development of Azadegan crude oil field. It shall be mentioned that Japan-based Inpex Corporation and Petronas are also part of the consortiums that are bidding for the development of oil field. 

Via the latest move, Iranian intelligence agents could easily watch and monitor the activities by the companies present in the consortium. Also, each Iranian company would get a chance to interact with the activities of the Big Oil on an international platform. 

Having said this, it shall be noted that Shell has always been on close and good terms with Iran- a country it has a long history with. More so, the Anglo-Dutch company happens to be the largest buyer of the Iranian oil. Back in November, 2010, an article by Reuters stated: “Companies are still finding ways to buy Iranian oil. Royal Dutch Shell and some Italian and Spanish refiners buy Iranian barrels with finance coming from Chinese and Italian banks”

Although the latest move is great for the country but it is not beneficial for the oil & gas global markets; it would give rise to crude oil supplies—a detrimental hit to energy prices.

SOURCE

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