United for Peace of Pierce County, WA - We nonviolently oppose the reliance on unilateral military actions rather than cooperative diplomacy.

Shell and Repsol have pulled out of Phase 13 of Iran's South Pars, the world's largest gas field, the Financial Times of London reported Sunday.[1] -- Anna Fifield and Javier Blas called the decision "a blow to Tehran’s attempts to expand its energy exports in the face of U.S. and international sanctions." -- However, both companies said they "could still participate in other phases." -- The next day a senior Iranian energy official said that production of another part of the South Pars field operated by StatoilHydro, a Norwegian energy company, would begin early this summer, Reuters reported.[2] -- For more on the South Pars field, see here....

SHELL AND REPSOL DROP IRAN GAS PROJECT
By Anna Fifield (Tehran) and Javier Blas (London)

Royal Dutch Shell and Spain’s Repsol have pulled out of one of Iran’s biggest gas projects, dealing a blow to Tehran’s attempts to expand its energy exports in the face of U.S. and international sanctions.

The pair will withdraw from the $10bn-plus development of phase 13 of South Pars, the world’s largest gas field. They say they could still participate in other phases.

Their decision is made as Washington intensifies pressure on international companies to stop operating in Iran, part of a campaign to isolate Tehran over its refusal to halt its nuclear program.

Neither Shell nor Repsol would comment on the U.S. pressure. People close to the companies cited geopolitical uncertainty and spiralling costs as the reasons behind the decision.

“Shell has agreed the principle of substitution of alternative later phases for the Persian LNG project so that [the National Iranian Oil Company] can proceed with the immediate development of phase 13,” Shell said.

Shell and Repsol last year signed a preliminary deal with the NIOC by which the two European companies would help develop phases 13 and 14 of South Pars, contributing the gas to the Persian liquefied natural gas project. They are likely to continue to act in a technical advisory role on phase 13.

Iran had been pushing Shell and Repsol to finalize the deal because phase 13 is on the South Pars border with Qatar, which is already pumping gas from its side. Iran’s oil minister last month gave the pair, with Total of France, which is involved in phases 11 and 12, a June deadline for finalizing their respective contracts.

Russia’s Gazprom, Sinopec of China, and the Indian national oil company were all keen to take their place, he warned.

Shell said on Sunday it would pull out of Phase 13 because it could not meet the Iranian requirements to develop the block quickly.

Shell and Repsol are understood to be considering developing phases 20 and 21 of South Pars instead, but these blocks would take at least a decade to become operational.

The whole project hangs in the balance. “We have not yet taken a decision as to whether to proceed with the Persian LNG project,” Shell said.

TEHRAN -- A section of the huge South Pars gas field that is operated by StatoilHydro will start production soon, a senior Iranian energy official said on Sunday, after a two-year delay of the $2.7 billion project.

Mohammad-Javad Shams, board member of the Pars Oil and Gas Company, was speaking a day after Royal Dutch Shell RDSa.l said it had pulled out of developing another phase of South Pars, after pressure not to participate from U.S. lawmakers.

Washington is spearheading a drive to isolate Tehran over its disputed nuclear ambitions. Western powers fear Iran is seeking to build nuclear bombs. Tehran rejects the charge.

Shams declined to comment on Saturday's statement by a Shell spokeswoman but said South Pars phase eight would start up in the Iranian month that begins on June 21, followed by phases six and seven. Statoil handles the offshore part of the project.

He said they would reach full production capacity of 1.3 billion cubic feet (33.8 million cubic metres) each of natural gas per day by the end of the 2008-09 Iranian year next March.

"(This) is about 300 million cubic feet above the yield from other phases which stands at one billion cubic feet a day," said Shams, who is project manager of South Pars' phases 6-8.

Shell, Spain's Repsol, and the National Iranian Oil Company (NIOC) signed a Memorandum of Understanding in January 2002 to develop phase 13 in a project to be known as Persian LNG.

At the time, Shell said deliveries of liquefied natural gas -- gas cooled to liquid under pressure for transportation in special tankers -- could begin in 2007.