A proposed multi-billion dollar agreement by oil giants Repsol of Spain and Royal Dutch Shell to help commercialize Iranian gas deposits could trigger U.S. sanctions. State Department spokesman Sean McCormack said Jan. 29. The investment agreement, if confirmed, would likely trigger a U.S. investigation and possible sanctions under U.S. law.
The Iranian news agency ISNA reported on Jan. 28 that Iran signed a preliminary agreement with Repsol and Shell to produce liquefied natural gas from Iran's South Pars gas field in a deal worth $10 billion..
The 1996 Iran-Libya Sanctions Act requires the president to impose sanctions on companies which invest more than $20 million in Iran's energy sector.
McCormack refused to speculate on what possible sanctions Repsol and Shell, which has operations in the U.S., could face if they go through with the South Pars investment. The Iran-Libya Sanctions Act lists six possible punitive measures, including the denial of U.S. export licenses, credit guarantees and bank loans to entities found in contravention of the law.
The Iranian news agency quoted the head of the National Iranian Oil Company, Gholam Hossein Nozari, saying a final decision on the deal, which he described as the biggest project of its kind in Iran, would be made later this year.
Copyright Agence France-Presse, 2007
