WASHINGTON (AFX) – A proposed multi-billion dollar agreement by oil giants Repsol YPF SA of Spain and Royal Dutch Shell to help commercialise Iranian gas deposits could trigger US sanctions, a senior US official said.
The Iranian news agency ISNA reported on Sunday 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 some 10 bln usd.
State Department spokesman Sean McCormack said the investment agreement, if confirmed, would likely trigger a US investigation and possible sanctions under US law.
The 1996 Iran-Libya Sanctions Act requires the US president to impose sanctions on companies which invest more than 20 mln usd in Iran’s energy sector.
‘The people who deal with those laws on a daily basis in their application I’m sure will take a look at this particular deal,’ McCormack said of the reported agreement involving Repsol and Shell.
‘If there’s an investment greater than a certain amount, as specified in US law, then our folks, our lawyers, take a look at it and the policy-makers take a look at it, and see if there’s any further steps that we, as a government, take,’ he said.
McCormack refused to speculate on what possible sanctions Repsol and Shell, which has operations in the US, 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 US 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.
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