Iran to to sign oil and gas deals with Total, Shell

(MENAFN- AFP) Iran was set to sign preliminary agreements with Total and Shell Wednesday to develop major oil and gas fields as it seeks to boost its output, an oil official said.

The deals include a $10-12 billion expansion of the South Azadegan oil field and another project at the Yadavaran oil field, both in southwestern Iran, as well as an offshore gas field near Kish Island in the Gulf.

The official, speaking on condition of anonymity, did not specify how the projects would be divided between France's Total and Anglo-Dutch giant Shell.

The agreements are only preliminary and must be finalised in the coming months, the official said.

The decision to award major energy projects to foreign firms 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 was awarded a $4.8 billion (4.3 billion euro) contract 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.