Royal Dutch Shell has reached an agreement with the National Iranian Oil Company (NIOC) on how to clear its outstanding $2.3bn debt. The agreement paves the way for the Anglo-Dutch firm to purchase crude volumes from Iran, as well as to secure acreage in Iran under the terms of the new Iran Petroleum Contract (IPC - MEES, 4 December 2015).
The debt stems from purchases of Iranian crude in 2011 and 2012 for which Shell was unable to pay due to the imposition of fresh sanctions in 2012. In the firm’s 2012 annual report, it said that “Currently, we have approximately $2,336 million payable to, and $11 million receivable from, National Iranian Oil Company. We are unable to settle the payable position as a result of applicable sanctions.” Shell considered payments in kind, such as grain or pharmaceuticals, but the UK government ruled against this (MEES, 26 April 2013). NIOC’s international affairs chief Mohsen Qamsari says that a mechanism has been agreed on how Shell can clear its debt once nuclear-related sanctions have been lifted. (CONTINUED - 368 WORDS)