Iran is negotiating with Repsol YPF SA (REP) and Royal Dutch Shell PLC (RDSA) to switch their gas exploration blocs with others due for later development, the oil minister was quoted Thursday as saying.
"The border areas phases 13 and 14 of the South Pars gas field were allocated to Shell and Repsol," Gholam Hossein Nozari was quoted as saying by the Hamshahri newspaper. "But instead of these two, we are examining giving them other phases.
"Phase 15, 16, 20 and 21 are being negotiated with Shell and Repsol," he said.
A Repsol source said earlier this month that two firms sought to exchange their participation in bloc 13 for a role in bloc 20 or 21 due to rising development costs. Blocs 20 and 21 will take at least a decade before they become operational while bloc 13 is expected to be developed much sooner, reports said.
The comments came after sources in Repsol said the company wanted to swap its phase in the offshore South Pars field, Iran's largest gas field, owing to rising development costs.
According to the official IRNA news agency, Nozari said "we are negotiating with these companies to allocate other phases of the field's development, where a delay does not harm the reservoir.
"We are pursuing similar talks with Total SA (TOT)," he said, without giving further details.
Under a deal agreed in 2006, Total is to exploit phase 11 of the South Pars field and to produce liquefied natural gas for export and build a liquefaction plant, but the deal is held up by a price dispute.
Iranian officials have urged the company to take a decision by June in order to avoid a replacement by other companies in the gas deal. However they later denied such an ultimatum.
In January 2007, the U.S. government reportedly told Royal Dutch Shell and Repsol, which both have major interests in the U.S., their project in Iran would probably infringe U.S. law.
Iran has the world's second-largest reserves of natural gas. The South Pars field in the Gulf has around 14 trillion cubic meters of gas, which represents about 8% of world reserves.
The development of the giant offshore field has been delayed amid a lack of investment in a country faced with severe gas needs of its own in winter at the same time as planning ambitious gas export projects to Asia and Europe.