Irrespective of the outcome of Shell's evaluation, Norway's Statoilin late May signed a memorandum of understanding with the local Petropars, which has the buy-back contract for the project. The preliminary agreement is set to pave the way for Statoil to acquire a major stake in the three-phase development.

'We are negotiating details with Statoil at the moment,' Akbar Torkan, chairman and president of Petropars, told MEED on 17 June. Torkan says that Statoil has expressed interest in acquiring 40 per cent of the project's offshore development, which is equivalent to a 15-20 per cent stake in the whole project. However, a Statoil representative says that all options, including splitting the scheme into an offshore and an onshore section, are still open.

Separate talks are ongoing between Petropars and Shell over Enterprise Oil's 20 per cent stake in the three South Pars phases. In April, Shell took over the UK firm and its Iranian interests, but has not yet decided whether it will proceed with the project (MEED 5:4:02).

'We have started discussions with Shell,' Torkan says. 'All the relevant information has been delivered and Shell will study the material and then decide.'

A Shell representative on 17 June said that 'a commercial decision' about Enterprise Oil's commitment would be taken later this year, but declined to comment on outstanding cash calls made by Petropars on the UK firm.

Torkan says that should negotiations with either or both parties fail, Jersey-registered National Iranian Oil Companysubsidiary Naftiran Intertrade Company (NICO)has guaranteed to raise the required finance. Parts of the project may also be financed through financing schemes proposed by contractors bidding for projects under phases 6-8.

Some bidders for the estimated $1,200 million onshore package covering treatment facilities have already submitted their own financing proposals and will be given priority during the bid evaluation. As a result, France's Bouygues Offshore, which participated in the tender without submitting a financing offer, has decided to withdraw from the bid process.

The four consortia left bidding for the engineering, procurement and construction (EPC) contract are: Japan's Toyo Engineering Corporationwith the local Industrial Development & Renovation Organisation and financing support from Japanese trading house Mitsui & Company; Japan's Chiyoda Corporationwith the local Tehran Jenoub, backed by Mitsubishi Corporation; South Korea's Samsung Corporationwith the local Al-Azaraband the backing of the Export-Import Bank of Korea; and Sharjah-based Petrofac Internationalwith an unidentified local firm. It is not clear whether the Petrofac-led group has proposed its own financing scheme.

The companies held a bid clarification meeting with Petropars in mid May, with final proposals set to be submitted on 4 July.

The estimated $30 million offshore package to supply three jackets has been awarded to a partnership of Iran Shipbuilding & Offshore Industries Company (ISOICO)and the UK's SLP Engineering.

On another offshore package, which covers the supply of topsides and laying of pipelines, Petropars is evaluating bids from seven companies, including ISOICO with SLP. Petropars' Torkan says that the estimated $400 million contract is expected to be awarded in early July.

Total development of phases 6-8 is estimated to be worth at least $2,000 million. The three-phase project will produce 80 million cubic metres a day of sour gas, to be reinjected into the onshore Aghajari oil field, and 120,000 barrels a day of condensate, allocated to provide feedstock to the National Petrochemical Company.