Europe Pressed to Shun Iranian Oilfield
August 15, 2003
The Financial Times
Spencer Abraham, US energy secretary, has warned the Netherlands and Italy not to allow its companies to invest in Iran's giant Azadegan oilfield.
Mr Abraham's move, made on a trip to Europe this week, heralds a new US campaign to increase pressure on a reluctant Europe to isolate Iran over its nuclear weapons programme.
In 2000 Iran agreed with the Japanese government to give priority rights to Japex and Indonesia Petroleum, both Japanese companies, to develop the field in return for Japanese loans.
The US State Department in the past months has put pressure on Tokyo to forgo developing the field, which is said to hold up to 45bn barrels of oil.
Mr Abraham, who on Friday cut short his trip to Europe because of the massive power outages in North America, was asked to "secure commitments from other governments and companies" not to step in and snatch up the field if the US was successful in dissuading Japan from making an investment, a senior administration official told the FT.
He said that Japan was "open to the idea of forgoing the field" and that discussions were "moving in the direction we want".
The Iran-Libya Act of 1996 imposed sanctions on non-US companies that invested more than $20m (?17.7m, £12.4m) in Iran's oil or natural gas sector. But neither Bill Clinton, the former president, nor President George W. Bush enforced the measure.
Antonio Marzano, Italy's industry minister, told Mr Abraham that Eni, Italy's biggest energy company - which has interests in both Iran's on and offshore oil and natural gas fields - would provide written assurance that it would not take over the Azadegan field.
However, the Dutch government gave the US no commitment that Royal Dutch/Shell would not widen its investment in Iran. Shell in 1999 signed an $800m deal to develop two oilfields, one of which began production in late 2001.
Shell, together with Total of France and British Petroleum, has also shown interest in another oilfield in south-western Iran.
The US is still looking for a promise by France that Total, which rarely has qualms about investing in countries deemed unacceptable by the US, would not expand its oil and gas activity in Iran.
Iran, which holds 90bn barrels of oil reserves, is counting on foreign investment of up to $5bn a year to increase its daily oil production. This was as high as 6m b/d in 1974 but has remained less than 4m b/d since the revolution in 1979. Despite the threat of US sanctions, more than 90 companies are active or have shown interest in Iran's oil sector. http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1059479056119&p=1012571727172