logo
Plus   Neg
Share
Email

US Sanctions On Iranian Energy Firm; 4 Oil Majors To End Iran Operations

us-naftiran-100110.jpg

The United States has imposed sanctions on a Swiss subsidiary of Iran's state-owned oil company for its involvement in the Iranian petroleum sector.

The State Department took the action on Naftiran Intertrade Company, or NICO, (Srl), under the Iran Sanctions Act, aimed at pressing Tehran to halt its clandestine nuclear enrichment program.

In addition, the U.S. government received commitments from four major European international energy firms to terminate their investments and avoid any new activity in Iran's energy sector, delivering a heavy blow to that country.

The oil companies that have pledged to end their investments in Iran's energy sector are Total (TOT) of France, Statoil (STO) of Norway, Eni (E)of Italy and Royal Dutch Shell (RDS-A) of Britain and the Netherlands.

This was announced by Deputy Secretary of State James B. Steinberg at a news conference on Thursday.

International companies doing business with blacklisted Iranian firms are under the threat of facing U.S. sanctions, and are forced to end their operations in Iran.

Japanese oil company Inpex Corp reportedly hinted at canceling its oil field project in Iran, although the explorer does not figure in the U.S. list facing potential sanctions.

Steinberg said the four companies "provided assurances to us that they have stopped or are taking significant verifiable steps to stop their activity in Iran and gave assurances not to undertake new energy-related activity in Iran that may be sanctionable."

He clarified that as long as these companies conform to their assurances, they would not be regarded as "companies of concern" for their past Iran-related activities.

These are the first public actions involving companies investing in Iran's energy sector since the Iran Sanctions Act was expanded by the Congress on July 1 when President Barack Obama signed the Comprehensive Iran Sanctions, Accountability, and Divestment Act, or CISADA, into law.

CISADA is in consistent with the U.N. Security Council (UNSC)Resolution that expresses concern that Tehran is using revenues from its energy sector to fund its nuclear program, as well as procurement for its energy sector to mask procurement of dual-use items.

Steinberg insisted that "a nuclear-armed Iran would severely threaten the security and stability of a part of the world crucial to our interests and the health of the global economy."

The State Department is launching investigations into some international oil companies that have not yet committed to ending their activities in Iran's petroleum sector, he added.

Russia was the latest among a number of entities slapping sanctions on Iran, based on a UNSC resolution adopted in August. Last week, it suspended supply of S-300 anti-aircraft missile systems to Iran.

The United States, South Korea, the European Union, Australia, Canada, Japan and Norway have already enforced sanctions on Iran for its failure to meet its international obligations.

The U.S. welcomed the Russian ban and urged other countries to join the "growing international consensus" against Iran's nuclear program and to take necessary steps to ensure comprehensive implementation of the UNSC resolution.

NICO, which is based in Lausanne, Switzerland, is an international energy trading company and a wholly-owned subsidiary of the National Iranian Oil Company.

NICO has provided hundreds of millions of dollars of financing for development projects in Iran's petroleum sector, and the sanctions will further isolate the company from the international business community, according to Steinberg.

NICO has three subsidiaries, London-based Iranian Oil Company UK Ltd, and Iran-based Petropars and PetroIran.

The sanctions come at a time the company is set to expand its role in the field of international project financing in the oil and gas industry.

A key player in Iran's energy sector, NICO handles trading and swaps operations on behalf of National Iranian Oil Company (NIOC), one of the world's largest oil companies.

NaftIran is the main agent of Iran's gasoline imports.

Under swap arrangements with Turkmenistan, Azerbaijan, and Kazakhstan, Iranian ships supply crude oil from the Central Asian producers to its Caspian ports.

In exchange, Iran delivers the equivalent amount of crude on behalf of the three countries to their consumers in the Persian Gulf.

by RTTNews Staff Writer

For comments and feedback: editorial@rttnews.com

Follow RTT