(Recasts with media saying deal signed)
TEHRAN Dec 26 Iran signed a $16 billion gas
development deal with Malaysian group SKS in Tehran on Wednesday
after reaching a preliminary agreement in January, Iranian media
Iranian officials were not immediately available for comment
on the agreement, the kind of energy deal that the United States
has been trying to prevent.
Washington, which is leading efforts to isolate Tehran over
atomic activities which the West fears may be used to build
bombs, has sought to discourage foreign companies from investing
in one of the world's largest oil exporters.
"The contract for a plan to develop the Golshan and Ferdows
gas fields was signed today between Pars Oil and Gas Company, as
a representative of the National Iranian Oil Company, and
Malaysia's SKS Ventures," the official IRNA news agency said.
State television carried a similar report.
Iran and SKS signed a preliminary agreement in January to
develop Iran's southern Golshan and Ferdows gas fields and build
plants to produce liquefied natural gas (LNG).
A senior Iranian official said then that it would take 25
years to complete and that the Malaysian company would have 50
percent of the produced LNG, adding that the two gas fields
contained 60 trillion cubic feet of gas.
Iran sits atop the world's second largest gas reserves after
Russia. But sanctions, politics and construction delays have
slowed its gas development, and analysts say the country is
unlikely to become a major exporter for a decade.
Economists have said many foreign firms, particularly
Western companies, are increasingly wary of investing in the
Islamic Republic after the U.N. imposed two rounds of sanctions
on the country over its nuclear row.
But the country's large oil and gas reserves still make it a
magnet for international energy firms. Earlier this month, Iran
said China's Sinopec would invest around $2 billion under a deal
to develop the huge Yadavaran oil field, a deal which drew a
swift rebuke from Washington.
The United States is pushing for a third set of U.N.
sanctions, even though a U.S. intelligence report said Tehran
had halted its nuclear weapons programme in 2003.
Iran, saying it has never had plans to build nuclear bombs,
insists its nuclear work is peaceful and aimed at generating
electricity so that it can export more of its oil and gas.
In January, the head of a key committee in the U.S. Congress
called for a halt to trade talks with Malaysia after the
preliminary gas development agreement was signed with Iran.
But a U.S. trade official last month said the United States
and Malaysia planned to resume formal negotiations on a free
trade agreement in early 2008.
(Reporting by Zahra Hosseinian, Writing by Fredrik Dahl;
Editing by David Stamp)