TEHRAN: Iran signed a preliminary agreement with Shell on Wednesday to work towards developing major oil and gas fields as it seeks to boost its output.

The deals open the way for Shell to carry out assessments at the South Azadegan and Yadavaran oil fields, both in south-western Iran, as well as an offshore gas field near Kish Island in the Gulf.

Hans Nijkamp, a vice-president at Shell, said the deal “opens a new chapter” for the Anglo-Dutch company in Iran.

“International markets remain under pressure but the Islamic republic’s return brings stability for the world’s energy provision as well as the country’s economic health,” he said at the signing ceremony.

Iranian oil officials did not comment on why a spokesman had earlier said the signing also involved France’s Total.

Iran has estimated that the South Azadegan project alone could be worth some $10 billion.

Efforts to attract foreign firms for major energy projects caused some controversy when the tenders were first announced in October.

A senior commander in the paramilitary Revolutionary Guards, which has extensive economic interests in the energy sector, said it was a “disgrace” for Iranian firms to be subordinated to foreigners in the proposed contracts.

But the oil ministry says foreign capital and know-how are vital to expanding the country’s energy sector.

Last month, Total signed a preliminary agreement for a $4.8bn (4.3bn-euro) project to develop an offshore gas field at South Pars — the first deal of its kind since international sanctions were lifted in January under a nuclear deal with world powers.

Published in Dawn, December 8th, 2016