Shell Expected to Sign Iran Oil Deal Despite Uncertainty Over Trump
Royal Dutch Shell PLC is expected to agree on Wednesday to develop a major Iranian oil field, a spokeswoman for the country’s oil ministry said, signaling that giant energy companies won’t be deterred by President-elect Donald Trump’s pledge to undo the Iran nuclear deal.
Total SA of France on Wednesday is also negotiating an investment in its second big Iranian energy development, the spokeswoman told The Wall Street Journal. The oil ministry initially said Total would be part of Wednesday’s announcement.
The return of Shell would be a breakthrough for Iran’s energy industry, which has been slow to attract investments from the world’s biggest oil companies since the U.S. and other world powers lifted sanctions related to Tehran’s nuclear program. The continued existence of separate U.S. sanctions on Iran over terrorism, human rights and weapons has impeded investment, while oil companies in particular are concerned with the terms Iran wants to impose on foreign companies.
The Iranian spokeswoman said an announcement would be made in Tehran at 2 p.m. local time (10:30 a.m. GMT).
The announcement will be for a so-called “heads of agreement,” a nonbinding pact that falls short of a contract but publicly commits the companies to begin hashing out a partnership with Iran’s state oil company. It is similar to the $4.8 billion deal by Total to develop a huge gas field in Iran, announced on Nov. 8—Election Day in the U.S.
The spokeswoman didn’t disclose whether Shell was committing to an amount of spending.
The plans open both companies to potential risks from an incoming Trump administration. Mr. Trump has called the Iran nuclear pact a “disaster” and “the worst deal ever negotiated,” and he has vowed to renegotiate it or pull out altogether.