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By Benoit Faucon

Source: The Wall Street Journal

July 16, 2010

LONDON—The engineering arm of Iran’s Revolutionary Guard Corps said Friday it was pulling out of projects in a giant Iranian natural-gas field, blaming mounting sanctions from the West.

The decision is a blow to a push by President Mahmoud Ahmadinejad to tighten control of the oil and gas industry and suggests a round of fresh international sanctions specifically targeting the IRGC, a paramilitary organization with a range of business subsidiaries, is causing new difficulty for the group.

It isn’t clear what effect the move would have on the giant natural-gas project known as South Pars. Tehran has struggled to recruit foreign partners in the project for years. Iranian officials need foreign capital and know-how to develop the gas reserves, but they have seen the world’s biggest oil producers shy away from preliminary commitments to get involved.

Foreign hesitation has heightened over the last year, as the Obama administration threatened to enact fresh economic sanctions on Iran to curb its nuclear program if Washington didn’t make progress diplomatically.

As big international companies stayed on the sidelines, domestic companies including some affiliated with the IRGC said they could fill the void.

But the Revolutionary Guard now appears to be backtracking somewhat after the United Nations, the U.S. and the European Union all have moved recently to enact fresh sanctions targeting companies affiliated with it.

The move by the Guard’s engineering arm, Khatam al-Anbiya, to back out of South Pars may help protect the wider project—or individual foreign partners—from falling foul of the new sanctions.

“Recently, in an oppressive action by the West, Khatam al-Anbiya has been slapped with sanctions,” the company said on its website.

In 2006, Khatam al-Anbiya got contracts worth a combined $2.09 billion to develop two phases of the South Pars gas field. The deals were part of a string of projects—from petrochemical plants to oil drilling—awarded to the group after the election of Mr. Ahmadinejad in 2005.

The Iranian president also secured the appointment of former IRGC official Masud Mirkazemi as oil minister last year, and an Ahmadinejad loyalist recently took the helm of the National Iranian Oil Co.

Last month, Khatam al-Anbiya was specifically named by new U.N. sanctions imposed against Iran over its nuclear program. The IRGC and Khatam al-Anbiya had already been named in previous, unilateral, U.S. sanctions.

The West suspects Iran’s nuclear program has military aims, while Iran says it is peaceful. The EU says Khatam al-Anbiya’s subsidiaries were heavily involved in the construction of an Iranian uranium enrichment site in Qom.

There have been other indications recently of a retreat by the IRGC from the oil patch, amid the new sanctions push. Last month, Khatam al-Anbiya failed to win the bulk of the $21 billion in contracts awarded to domestic companies to develop South Pars. That surprised observers because Iranian officials had predicted that the group would win the bids. Marine services company Sadra, which is partly owned by Khatam al-Anbiya, did get some contracts, however.

A spokesman for the company operating South Pars didn’t return a request for comment Friday on the reasons behind the pullout by Khatam al-Anbiya.

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Source: Reuters

July 14, 2010

BP (BP.L) confirmed on Tuesday it stopped supplying jet fuel to Iran Air at Germany’s Hamburg airport. [ID:nLDE66C228]

BP declined to give a reason for ending the contract, but the halt in supply followed reports Iranian aircraft have been denied fuel because of the latest set of U.S. sanctions designed to put pressure on the Islamic Republic over its nuclear programme.

Two Iran Air aircraft were unable to refuel at the airport earlier this month and had to be diverted.

A growing number of oil companies, trading houses and other international firms have stopped doing business with Iran this year as the U.S. has led international efforts to isolate Tehran.

* BP (BP.L) confirmed on July 13 it had stopped supplying jet fuel to Iran Air at Hamburg airport.

* Lloyds of London said on July 9 it would not insure or reinsure petroleum shipments going into Iran. [ID:nLDE6680Z5]

* South Korea’s GS Engineering & Construction (006360.KS) on July 1 cancelled a $1.2 billion gas project in Iran following the imposition of U.S. sanctions.

* Spain’s Repsol (REP.MC) said on June 28 it had pulled out of a contract it won with Royal Dutch Shell (RDSa.L) to develop part of the South Pars gas field in Iran. [ID:nLDE65R1O2]

* French oil group Total (TOTF.PA) on June 28 joined the growing list of oil firms that have stopped supplying gasoline to Iran because of U.S. sanctions. [ID:nLDE65R1OR]

* Italy’s oil and gas major Eni (ENI.MI) told U.S. authorities on April 29 it was handing the operation of Darkhovin oilfield in Iran to local partners to avoid U.S. sanctions. [ID:nLDE63S0XT]

* Russian oil firm LUKOIL (LKOH.MM) would cease gasoline sales to Iran, industry sources said on April 7, following a similar decision by Royal Dutch Shell (RDSa.L) in March. LUKOIL had supplied some 250,000 to 500,000 barrels of gasoline to Iran every other month, traders said. [ID:nLDE63606I]

* Malaysia’s Petronas has stopped supplying gasoline to Iran, a company spokesman said on April 15. [ID:nSGE63E09V]

* Luxury carmaker Daimler (DAIGn.DE) announced plans on April 14 to sell its 30 percent stake in an Iranian engine maker and freeze the planned export to Iran of cars and trucks. The announcement followed similar action by German insurers Munich Re (MUVGn.DE) and Allianz (ALVG.DE). [ID:nLDE63C0TG]

* India’s largest private refiner, Reliance Industries (RELI.BO), would not renew a contract to import crude oil from Iran for financial year 2010, two sources familiar with the supply deal said on April 1. [ID:nSGE630033] Sanctions have not targeted crude purchases, but sources said Reliance may have been trying to distance itself from dependence on the Islamic Republic.

* Oil trading firms Trafigura and Vitol stopped gasoline sales to Iran, industry sources said on March 8. [ID:nLDE627129]

* Ingersoll-Rand Plc (IR.N), a maker of air compressors and cooling systems for buildings and transport, said it will no longer allow subsidiaries to sell parts or products to Tehran. [ID:nN09245639]

* Oilfield services company Smith International (SII.N) said on March 1 it was actively pursuing the termination of all its activities in Iran. [ID:nN01116545]

* Caterpillar (CAT.N), the world’s largest maker of construction and mining equipment, said on March 1 it had tightened its policy on not doing business with Iran to prevent foreign subsidiaries from selling equipment to independent dealers who resell it to Tehran. [ID:nN01245727]

* German engineering conglomerate Siemens (SIEGn.DE) said in January it would not accept further orders from Iran. [ID:nLDE60P1LJ]

* Glencore GLEN.UL ceased supplying gasoline to Iran in November 2009, according to traders. [ID:nSGE60A0CF]

* Chemical manufacturer Huntsman Corp (HUN.N) announced in January that its indirect foreign subsidiaries would stop selling products to third parties in Iran.

* Accounting giants KPMG KPMG.UL, PricewaterhouseCoopers, and Ernst & Young have declared themselves free of any business ties to Iran.

STILL DEALING WITH IRAN

* The website of New York-based lobby group United Against Nuclear Iran lists scores of companies it says still do, or have done, business with Iran (here). The list includes companies that have severed links with Iran.

* The U.S. Government Accountability Office reported in April that 41 foreign companies were involved in Iran’s oil, natural gas and petrochemical sectors from 2005 to 2009. In a report in May, the GAO said seven of those companies received U.S. government contracts worth nearly $880 million.

These were: Daelim Industrial Company of South Korea; Eni; PTT Exploration and Production of Thailand; Hyundai Heavy Industries of South Korea; and GS Engineering and Construction of South Korea.

* Russia’s Gazprom (GAZP.MM) confirmed in March it was in talks with Iran on developing the Azar oil field.

* Pakistan’s foreign ministry said on June 10 that a $7.6 billion project for export of Iranian natural gas to Pakistan would be unaffected by the imposition of fresh U.N. sanctions [ID:nSGE6590G7]

(Compiled by David Cutler, London Editorial Reference Unit, Ross Colvin in Washington and Simon Webb in Dubai; Editing by Alison Birrane)

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Germany’s emerging status as a global political power shines a light on its substantial dealings with Iran, putting its aspiration to be a diplomatic heavyweight at odds with its economic interests.

By Borzou Daragahi

Source: Los Angeles Times

July 13, 2010

Reporting from Berlin — Chancellor Angela Merkel can warn companies all she wants to stop doing business with Iran. Yet commerce between German firms and the Islamic Republic keeps expanding, as businesses here continue longstanding relationships with Tehran.

In the first four months of 2010, trade between Iran and Germany totaled nearly $1.8 billion, up 20% from the same period last year, according to the German-Iranian Chamber of Commerce in Hamburg.

Germany and Iran “have a trading relation which is around 140 years old,” said Michael Tockuss, a leading member of the lobbying group. “There are a large number of very well established business relations that go far beyond just the present.”

Trade with Iran is especially sensitive given the Holocaust and Germany’s post- World War II commitment to the state of Israel. Since first winning election, Iranian President Mahmoud Ahmadinejad has repeatedly predicted the demise of Israel.

“If this proclaimed special relationship [between Germany and Israel] really has any meaning, and is not just rhetoric, this is the case where this should be applied,” said Jonathan Weckerle of Stop the Bomb, a Berlin-based advocacy group in favor of cutting ties to the Islamic Republic. “We can see if it’s only rhetoric or if it influences political decisions, even if it brings some costs to it.”

Even as some Western businesses withdrew from Iran in recent years, German industry quietly expanded business ties with the Islamic Republic, remaining in a potentially lucrative market where it can offer its specialized machinery without competition from the United States. In recent years, Washington has urged the world to give up trade with Iran as a way of pressuring it to curtail its nuclear program.

Germany’s emerging status as a global political powerhouse has shined a light on its substantial dealings with Iran, putting its aspirations to become a diplomatic heavyweight at odds with its economic interests. Germany’s export-dependent entrepreneurs fear that if they cut ties with Iran, they’re out for the next generation, and Malaysian, South Korean or Chinese rivals will pick up the slack.

“For every lost European contract, the Asians get it,” said Walter Posch, an Iran specialist at the German Institute for International and Security Affairs, a Berlin think tank funded by the government. “And we don’t have the capacity to come back quickly.”

In contrast to an American political consensus against trade with Iran, high-profile German politicians and industrialists regularly advocate business with the Islamic Republic. Germany sold $4.5 billion worth of goods to Iran last year while importing only about $600 million.

As major firms such as Siemens or Daimler buckle under political pressure and wind down business ties with Iran, their subcontractors and suppliers are making side deals with Iranian companies, experts say.

“It’s not irrelevant,” Hans-Peter Burghof, an economist at the University of Hohenheim in Stuttgart, said of the trade.

Other big German companies, including Munich-based pharmaceutical giant Bayer, are continuing to sell Iran everything from blood pressure medicine to foam for mattresses.

“Our products are aimed at the everyday needs of the population,” said Guenter Forneck, a spokesman for the company.

Despite the recent net increase in trade, there are indications that many German businesses may be winding down ties to Iran. German insurance companies, banks and major manufacturers are publicly shunning business with Tehran in response to pressure by advocacy groups. The German government is refusing to offer so-called guarantees or embassy support for businesses in Iran, causing even smaller companies to think twice.

“There are some companies — small and medium-sized companies — who are very much dependent on support of the German government for engaging in businesses in countries like Iran,” said Michael Bauer, a Middle East expert at the Center for Applied Policy Research, a think tank in Munich.

But others argue that discouraging ordinary trade with Iran to halt its nuclear program is pointless and that Merkel’s heating up of anti-Iranian policies gratuitously antagonizes leaders in Tehran. Many German businesses would be shunning Iran anyway, says Posch, in large part because they can’t stand working with those in charge since the election of Ahmadinejad.

“They saw good management replaced by sellouts and yes men,” he said. “They have changed their attitude toward Iran from a country where you can do business to a country run by incompetent radicals.”

Whatever Iranians have achieved in the nuclear field, they’ve done illegally or under the table, say some analysts and businesspeople, who argued only for strict controls over German exports specifically designed for nuclear program use.

But many technologies have double uses. The same tunneling equipment used to create the subway systems in major Iranian cities can also be used to build underground nuclear facilities.

Political analysts concede that American pressure has accomplished one thing: placing Iran’s nuclear aspirations at the forefront of relations between Germany and Iran. “The nuclear issue is above everything right now,” said Konstantin Kosten, of the German Council on Foreign Relations in Berlin.

But by engaging instead of shunning Iran, trade advocates say, Germany and Europe can give Tehran an incentive to eventually come clean on its past activities, perhaps halt sensitive aspects of its program and maybe even crack open the authoritarian government.

“How did we get rid of communism?” economist Burghof said. “We opened the doors to the merchants, we implemented student exchanges. Communism rotted from within. This will happen in Iran if nothing from the outside happens. That’s what kept communism alive — the wars against them.”

Supporters of sanctions, however, say doing business with Iran emboldens hard-liners in the authoritarian government and heavily state-controlled economy increasingly dominated by the Revolutionary Guard, an elite branch of the military.

“If you do business with Iran, you don’t strengthen the middle class who grow in power and influence the government to be more pragmatic,” said Weckerle of Stop the Bomb, whose organization is made up of a coalition of Iranian exile groups and pro-Israel activists. “You really support the most radical elements, responsible for both the nuclear program and the political repression.”

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Source: Agence France Presse (AFP)

July 8, 2010

An Iranian F-5 jet fighter takes off in Chabahar city during a military exercise in 2009

WASHINGTON — New charges were filed Wednesday against Irish-based Mac Aviation Group and its officers for allegedly exporting F-5 fighter aircraft parts and other military equipment to Iran, the US Justice Department said.

In addition to the original charges against the firm unsealed in March 2009, two new charges allege a violations of the Arms Export Control Act, US officials said.

The new charges were contained in a superseding indictment from a grand jury in Washington against Mac Aviation and its officers, Thomas and Sean McGuinn of Sligo, Ireland.

The indictment said the firm purchased F-5 fighter aircraft parts, helicopter engines and other aircraft components from US firms and illegally exported them to Iran starting in 2005.

According to the indictment, the firm promised to deliver the parts to an Iranian trading company but concealed the final destination for the goods.

The new indictment alleges that from 2005 until 2006, the defendants purchased canopy panels designed for the F-5 fighter aircraft, and falsely stated that the end user was the Republic of Nigeria.

Instead, the panels were sold to Iran for 86,400 dollars.

The two officers could face prison terms of between five and 20 years for each of the charges.

The previous charges allege that Mac Aviation purchased 17 helicopter engines from Rolls-Royce in Indiana for 4.27 million dollars and exported them to Iran through companies in Malaysia and the United Arab Emirates.

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Source: Reuters

July 5, 2010

Iranian officials accused Germany, Britain and the United Arab Emirates on Monday of refusing to refuel Iranian passenger planes in response to tougher U.S. sanctions over its nuclear programme [ID:nLDE66418N].

A growing number of oil companies, trading houses and other international companies have stopped doing business with Iran this year amid a U.S. drive to isolate Tehran and international efforts to impose tougher sanctions.

Here are some of the companies:

Iran said on Monday that Germany, Britain and the United Arab Emirates were refusing to provide fuel to Iranian passenger planes following U.S. unilateral sanctions on the Islamic state, the ISNA news agency reported.

“Since last week, our planes have been refused fuel at airports in Britain, Germany and U.A.E because of the sanctions imposed by America,” Mehdi Aliyari, Secretary of Iranian Airlines Union, told ISNA news agency.

* Repsol (REP.MC) has pulled out of a contract it won with Royal Dutch Shell (RDSa.L) to develop part of the South Pars gas field in Iran. [LDE65R1O2]

– Separately, French oil group Total (TOTF.PA) said it had suspended sales of refined products to Iran. It said in April would cease gasoline sales to Iran if the United States passed legislation to penalize fuel suppliers to Iran. Congress passed legislation last week. [ID:nnN24148251]

* Italy’s oil and gas major Eni (ENI.MI) is handing the operation of Darkhovin oilfield in Iran to local partners to avoid U.S. sanctions, Eni told U.S. authorities on April 29. [ID:nLDE63S0XT]

* Russian oil major LUKOIL (LKOH.MM) will cease gasoline sales to Iran, industry sources said on April 7, following a similar decision by Royal Dutch Shell (RDSa.L) in March. LUKOIL had supplied some 250,000 to 500,000 barrels of gasoline to Iran every other month, traders said. [ID:nLDE636061]

* Malaysia’s Petronas has stopped supplying gasoline to Iran, a company spokesman said on April 15. [ID:nSGE63E09V]

* Luxury carmaker Daimler (DAIGn.DE) announced plans on April 14 to sell its 30 percent stake in an Iranian engine maker and freeze the planned export to Iran of cars and trucks. The announcement followed similar action by German insurers Munich Re (MUVGn.DE) and Allianz (ALVG.DE). [ID:nLDE63C0TG]

* India’s largest private refiner, Reliance Industries (RELI.BO), will not renew a contract to import crude oil from Iran for financial year 2010, two sources familiar with the supply deal said on April 1. [ID:nSGE630033]

* Oil trading firms Trafigura and Vitol are stopping gasoline sales to Iran, industry sources said on March 8. [ID:LDE627129]

* Ingersoll-Rand Plc (IR.N), a maker of air compressors and cooling systems for buildings and transport, said it will no longer allow subsidiaries to sell parts or products to Tehran. [IDnN09245639]

* Oilfield services company Smith International (SII.N) said on March 1 it was actively pursuing the termination of all its activities in Iran. [ID:nN01116545]

* Caterpillar (CAT.N), the world’s largest maker of construction and mining equipment, said on March 1 it had tightened its policy on not doing business with Iran to prevent foreign subsidiaries from selling equipment to independent dealers who resell it to Tehran. [ID:nN01245727]

* German engineering conglomerate Siemens (SIEGn.DE) said in January it would not accept further orders from Iran. [ID:nLDE60P1LJ]

* Glencore GLEN.UL ceased supplying gasoline to Iran in November 2009, according to traders. [ID:nSGE60A0CF]

* Chemical manufacturer Huntsman Corp (HUN.N) announced in January that its indirect foreign subsidiaries would stop selling products to third parties in Iran.

* Accounting giants KPMG KPMG.UL, PricewaterhouseCoopers, and Ernst & Young have declared themselves free of any business ties to Iran.

STILL DEALING WITH IRAN

* The website of New York-based lobby group United Against Nuclear Iran lists scores of companies it says still do, or have done, business with Iran (here). The list includes companies that have severed links with Iran.

* The U.S. Government Accountability Office reported in April that 41 foreign companies were involved in Iran’s oil, natural gas and petrochemical sectors from 2005 to 2009. In a report in May, the GAO said seven of those companies received U.S. government contracts worth nearly $880 million.

These were: Daelim Industrial Company of South Korea; Eni; PTT Exploration and Production of Thailand; Hyundai Heavy Industries of South Korea; and GS Engineering and Construction of South Korea.

* Russia’s Gazprom (GAZP.MM) confirmed in March it was in talks with Iran on developing the Azar oil field.

* Pakistan’s foreign ministry said on June 10 that a $7.6 billion project for export of Iranian natural gas to Pakistan would be unaffected by the imposition of fresh U.N. sanctions [ID:nSGE6590G7] (Writing by David Cutler, London Editorial Reference Unit, and Ross Colvin in Washington;)

More »

Source: Agence France Presse (AFP)

July 2, 2010

French oil giant Total chief executive Christophe de Margerie

AIX-EN-PROVENCE, France — The CEO of French energy giant Total on Friday criticised sanctions against Iran, saying an embargo on petrol products was an “error” that would harm ordinary people.

Speaking at an economic forum in Aix-en-Provence in southern France, Christophe de Margerie confirmed Total had suspended its deliveries to Iran in line with sanctions adopted by the UN, US and European Union in response to Tehran’s refusal to halt its uranium enrichment programme.

“I maintain this is a mistake. The embargo affects the population, too many things are politicised these days,” he told media.

“We do not think an embargo on the delivery of petrol products is a good way to settle differences of a political nature,” he said.

De Margerie said Total would resume deliveries at the first opportunity, saying it was a “serious mistake to mix things that are civil and political”.

On June 9, the UN Security Council adopted a resolution imposing sanctions on Tehran over its nuclear programme.

Additional US sanctions aimed at interrupting petrol imports were approved Thursday by President Barack Obama. The EU is set to finalise further measures at a meeting of foreign ministers July 26.

The US sanctions would prevent foreign companies from doing business with the US government if they had commercial ties to Iran.

Iran is the world’s fourth largest crude oil producer but lacks refinery capacity and is heavily dependent on imports of petrol and refined products.

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By Mari Iwata, Kosaku Narioka and Atsuko Fukase

Source: The Wall Street Journal

July 1, 2010

An Iranian engineer stood in front of Iran's South Pars gas-field facility in the Gulf coastal town of Asaluyeh in June 2005. AFP/Getty Images

TOKYO—A new American law aimed at ratcheting up financial pressure on Iran could hit a handful of Japanese energy and financial firms.

Reports issued by U.S. researchers attempting to document activity by multinational companies in Iran have named oil-and-gas producer Inpex Corp. and units of Japan’s three largest banks—Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group and Mizuho Financial Group Inc.—as doing business that could possibly run afoul of the new U.S. rules.

An Iranian engineer stood in front of Iran’s South Pars gas-field facility in the Gulf coastal town of Asaluyeh in June 2005.

The law, expected to be signed by President Barack Obama on Thursday, would ban any international firms doing business with certain Iranian banks and energy firms from conducting business inside the U.S. Multinationals from a number of countries throughout Europe, Asia and the Middle East could also be affected by the measure, according to the research reports. Once the law takes effect, the U.S. State Department will determine which companies could face penalties under the new rules.

The Japanese companies named in the reports said they were studying the law to see whether they would need to make any adjustments to comply with the new rules.

“We are aware that President Obama is expected to sign the bill. We will keep an eye on any impact,” Inpex President Toshiaki Kitamura told Dow Jones Newswires Thursday in an interview. He declined to comment further on the U.S. move or discuss the effect it could have on Inpex or its operations.

Inpex has a 10% stake in the Azadegan oil field in southwestern Iran, and has no current plans to sell that holding, Mr. Kitamura said.”We are responsible on our shareholders’ behalf for recovering money we had invested,” he added.

Inpex was named in an April report by the U.S. Government Accountability Office listing 41 firms from around the world that had commercial activity in Iran’s oil, gas and petrochemical sectors from 2005-2009.

Inpex, which engages in extensive global oil-and-gas activities, initially owned a 75% stake in the Azadegan project and was set to be the operator of the field. But in 2006, as the U.S. was stepping up pressure on allies to curb business ties with Iran, the National Iranian Oil Co. took over the bulk of the project’s shareholding and operations.

At that time, tension between the U.S. and Iran over the country’s uranium processing and nuclear-power development was running high. Some media reports said the Japanese government had responded to U.S. pressure on Inpex’s role in Iran. Japan’s Ministry of Economy, Trade and Industry is Inpex’s largest shareholder, with a 29.4% stake.

Mr. Kitamura declined to put a value on the Iran oil-field investment, but said “it is small compared with other major projects.” The Azadegan project was largely shelved in the summer of 2006, when development work hadn’t yet started.

Separately, a widely circulated report issued this year by a former U.S. Treasury Department official on global banks doing business with Iranian banks named the Big Three Japanese financial institutions. Spokespeople for the three Japanese banks declined to comment on the accuracy of the report, or how the law might affect their operations in Iran.

Another GAO report published in December 2007 showed potential investors in Iran’s energy sector, including Mitsui Engineering & Shipbuilding Co, which had a $288 million high-density polyethylene-petrochemical plant in Ilam province. The project was reported to be completed in 2010.

Masatoshi Inui, a spokesman for Mitsui Engineering & Shipping, said the company would face little impact by the new law, which focuses on selling Iran refined petroleum and helping it improve its domestic refining capacity. He said Mitsui Engineering & Shipping projects are petrochemical plants at the “downstream” and not for refining.

More »

Source: Reuters Africa

July 1, 2010

SEOUL – South Korea’s GS Engineering & Construction (GS E&C) (006360.KS: Quote) said on Thursday that it has called off a 1.42 trillion won ($1.2 billion) gas project in Iran following sanctions on the Middle East nation.

The company said in a filing to a regulatory agency that it it had cancelled on Wednesday the contract to sweeten gas from the South Pars field in Iran, signed with the Pars Oil and Gas Company (POGC) last October.

For a related story, click [ID:nSP493577]

The White House on Wednesday said U.S. President Barack Obama would sign into law tough new sanctions targeting Iran’s energy and banking sectors.

In a move to pressure Iran into curbing its nuclear programme, the House of Representatives and the Senate approved a new sanctions bill last week that penalises companies supplying Iran with gasoline. [ID:nN30265500]

South Pars is on the Iranian side of the world’s largest known gas reservoir not associated with oil production. ($1=1222.1 Won) (Reporting by Kim Yeon-hee; Editing by Manash Goswami)

More »

Source: Reuters Africa

June 28, 2010

Spain’s largest oil company Repsol (REP.MC: Quote) has pulled out of a contract it won with Royal Dutch Shell (RDSa.L: Quote) to develop part of the South Pars gas field in Iran, a spokesman said on Monday [ID:nLDE65R0JE].

A growing number of oil companies, trading houses and other international companies have stopped doing business with Iran this year amid a U.S. drive to isolate Tehran and international efforts to impose tougher sanctions.

Here are some of the companies:

* Repsol (REP.MC: Quote) has pulled out of a contract it won with Royal Dutch Shell (RDSa.L: Quote) to develop part of the South Pars gas field in Iran.]

– Separately, French oil group Total (TOTF.PA: Quote) said it had suspended sales of refined products to Iran. It said in April would cease gasoline sales to Iran if the United States passed legislation to penalize fuel suppliers to Iran. Congress passed legislation last week. [ID:nnN24148251]

* Italy’s oil and gas major Eni (ENI.MI: Quote) is handing the operation of Darkhovin oilfield in Iran to local partners to avoid U.S. sanctions, Eni told U.S. authorities on April 29. [ID:nLDE63S0XT]

* Russian oil major LUKOIL (LKOH.MM: Quote) will cease gasoline sales to Iran, industry sources said on April 7, following a similar decision by Royal Dutch Shell (RDSa.L: Quote) in March. LUKOIL had supplied some 250,000 to 500,000 barrels of gasoline to Iran every other month, traders said. [ID:nLDE636061]

* Malaysia’s Petronas has stopped supplying gasoline to Iran, a company spokesman said on April 15. [ID:nSGE63E09V]

* Luxury carmaker Daimler (DAIGn.DE: Quote) announced plans on April 14 to sell its 30 percent stake in an Iranian engine maker and freeze the planned export to Iran of cars and trucks. The announcement followed similar action by German insurers Munich Re (MUVGn.DE: Quote) and Allianz (ALVG.DE: Quote). [ID:nLDE63C0TG]

* India’s largest private refiner, Reliance Industries (RELI.BO: Quote), will not renew a contract to import crude oil from Iran for financial year 2010, two sources familiar with the supply deal said on April 1. [ID:nSGE630033]

* Oil trading firms Trafigura and Vitol are stopping gasoline sales to Iran, industry sources said on March 8. [ID:LDE627129]

* Ingersoll-Rand Plc (IR.N: Quote), a maker of air compressors and cooling systems for buildings and transport, said it will no longer allow subsidiaries to sell parts or products to Tehran. [IDnN09245639]

* Oilfield services company Smith International (SII.N: Quote) said on March 1 it was actively pursuing the termination of all its activities in Iran. [ID:nN01116545]

* Caterpillar (CAT.N: Quote), the world’s largest maker of construction and mining equipment, said on March 1 it had tightened its policy on not doing business with Iran to prevent foreign subsidiaries from selling equipment to independent dealers who resell it to Tehran. [ID:nN01245727]

* German engineering conglomerate Siemens (SIEGn.DE: Quote) said in January it would not accept further orders from Iran. [ID:nLDE60P1LJ]

* Glencore GLEN.UL ceased supplying gasoline to Iran in November 2009, according to traders. [ID:nSGE60A0CF]

* Chemical manufacturer Huntsman Corp (HUN.N: Quote) announced in January that its indirect foreign subsidiaries would stop selling products to third parties in Iran.   Continued

* Accounting giants KPMG KPMG.UL, PricewaterhouseCoopers, and Ernst & Young have declared themselves free of any business ties to Iran.

STILL DEALING WITH IRAN

* The website of New York-based lobby group United Against Nuclear Iran lists scores of companies it says still do, or have done, business with Iran (here). The list includes companies that have severed links with Iran.

* The U.S. Government Accountability Office reported in April that 41 foreign companies were involved in Iran’s oil, natural gas and petrochemical sectors from 2005 to 2009. In a report in May, the GAO said seven of those companies received U.S. government contracts worth nearly $880 million.

These were: Daelim Industrial Company of South Korea; Eni; PTT Exploration and Production of Thailand; Hyundai Heavy Industries of South Korea; and GS Engineering and Construction of South Korea.

* Russia’s Gazprom (GAZP.MM: Quote) confirmed in March it was in talks with Iran on developing the Azar oil field.

* Pakistan’s foreign ministry said on June 10 that a $7.6 billion project for export of Iranian natural gas to Pakistan would be unaffected by the imposition of fresh U.N. sanctions [ID:nSGE6590G7] (Writing by David Cutler, London Editorial Reference Unit, and Ross Colvin in Washington;)

More »

The Obama administration fears tough U.S. sanctions against companies doing business in Iran would anger foreign allies.

U.S. Defense Secretary Robert Gates, left, talks to his Turkish counterpart, Vecdi Gonul, at NATO headquarters in Brussels one day after the U.N. vote on Iranian sanctions, which Turkey opposed. (Carolyn Kaster / Pool Photo / June 10, 2010)

By Paul Richter

Source: Los Angeles Times

June 11, 2010

Reporting from Washington — The Obama administration, which labored for months to impose tough new United Nations sanctions against Iran, now is pushing in the opposite direction against Congress as it crafts U.S. sanctions that the White House fears may go too far.

Administration officials have begun negotiations with congressional leaders, who are working on versions of House and Senate bills that would punish companies that sell refined petroleum products to Iran or help the country’s oil industry.

Unlike the U.N. measures, congressional action would pertain only to U.S. policies and agencies and would not be binding on other countries. Other countries and groups of nations also are considering adopting measures to augment the U.N. action.

The sanctions are aimed at forcing Iran to giving up its nuclear program, which Western nations fear is geared toward developing nuclear weapons. Iran insists it is only interested in peaceful energy projects.

U.S. sanctions have strong support in Congress, and the administration backs them in principle as a way to strengthen the mild strictures adopted on Wednesday by the U.N. Security Council.

But the administration fears that the legislation also could damage relations with Europe, Russia and China, all of whom cooperated with U.S. efforts on the U.N. sanctions.

To avoid that possibility, the administration wants authority to waive U.S. punishment against companies from countries that have cooperated on Iran.

Many lawmakers are wary. Some say the Obama administration, like its predecessors, has been lax in enforcing existing Iran sanctions out of concern for good relations with other world powers.

“The administration doesn’t carry out the laws that are on the books, and they want the new law to be as weak and loophole-ridden as possible,” said Rep. Brad Sherman (D-Sherman Oaks), who has been pushing for years for such legislation.

Republicans have been ratcheting up their demands for Congress to hang tough, arguing that the U.N. resolution fell short of what was needed.

Rep. Ileana Ros-Lehtinen of Florida, the senior Republican on the House Foreign Affairs Committee, called the U.N. sanctions a “goose egg” and demanded that Congress impose “crippling sanctions against Iran.”

Russia already has warned that penalizing Russian companies “could lead to retaliatory measures.”

Russia said Thursday that it intends to go ahead with sales to Iran of a highly sophisticated surface-to-air missile that has been a source of U.S. concern.

There are serious issues with Europe, as well. Catherine Ashton, the European Union foreign policy chief, reminded Secretary of State Hillary Rodham Clinton in a recent letter that U.S. officials agreed in 1998 not to hit European companies with sanctions for doing business with Iran.

The pending legislation presents other difficulties for the administration. Since a petroleum cutoff would strike broadly at the Iranian population, such sanctions would be seen as undermining the Obama administration’s argument that it supports only those sanctions that focus narrowly on the Iranian leadership, said Peter Crail of the Arms Control Assn., a Washington-based advocacy group.

Meanwhile, U.S. business groups have been complaining that the legislation could punish them by barring U.S. firms from doing business with any foreign firms that have commercial ties to Iran.

Many oil and trading companies already have halted sales to Iran because of the looming threat of sanctions. But some that still could be penalized are Shell, Total and China Oil, said Mark Dubowitz of the Foundation for Defense of Democracies, a policy institute based in Washington.

BP, which is facing public relations problems because of the gulf oil spill in April, stopped selling gasoline to Iran in 2008, he said.