Spanish daily El Pais wrote on Thursday that under the contract, the two companies will start operations in Iran as of 2010 for extraction and sale of natural gas.

National Iranian Oil Company (NIOC) will be a party to the contract under which the bidders will set up two oil platforms in the Persian Gulf as well as installations for refining and storage of oil.

The companies would produce seven million tons of natural gas and one million tons of liquefied gas for sale in Europe and Asia.

El Pais said Repsol's entry to Iran as one of the world's oil rich center indicates a big step taken towards expansion of the Spanish company.

Shell announced the report in London on Wednesday but Repsol has not made any comments on the details of the contract due to its confidentiality.

El Pais said the companies had taken advantage of the OPEC meeting in Vienna to negotiate the deal with Iranian officials and kept the agreement on the issue as a secret until its ratification by Iran's Guardians Council.

Iran's Minister of Oil Bijan Namdar Zanganeh and the NIOC head Mir Moezzi signed the contract on behalf of Iran.

According to El Pais once the contract is finalized technical studies and engineering activities would start for construction of platforms and installation of facilities for production and storage of oil and gas in Assalouyeh port in southern Province of Bushehr.

One of the two companies, entering the deal, will be engaged in drilling and extraction operations in the upstream sector with a dlrs 1.5 billion investment, while the other one would be active in the downstream sector such as marketing, refining and distribution of gas with a total investment of dlrs 2.5 billion.

Based on the report, the NIOC would have a 50 percent stake in the project while the two companies will each have a 25 percent share. .

El Pais said the two platforms would have the capacity to produce 18 million cubic meters of natural gas a year.

The paper said that India, Asian region and Europe are the future markets for the products and Spain, Italy and the UK are the main European party to the process.

El Pais said the conclusion of the contract was of high significance for Iran and the country is eager for speedy implementation of the project.

Based on the report, Iran which has the world's second largest gas reserves after Russia has not made enough efforts for exploitation of of its gas deposits.

It said that Iran had inked the contract in the hope of turning into the most important gas exporter in the world.

... Payvand News - 9/24/04 ... --