Sanctions intact, the US oil majors are easing their way back to Iran

Published December 10th, 2000 - 02:00 GMT

On December 6 Iran’s deputy oil minister was quoted saying that “the removal of the American sanctions on Iran is inevitable.”  


To back up his contention, he said that, five months earlier, representatives of the US oil majors had informed Iranian officials that, if a Republican candidate ends up in the White House, the repeal of the sanctions is a done deal. But in any case, he added, both the Republican and Democrats believe today that the sanctions are useless. 


Several things are worth mentioning. While the US presidential race has yet to be decided, the still-front runner, George W. Bush, is a former oilman and owes much of his political good fortune to his well-heeled friends from the Texas oil community.  


But, possibly more important, there seems to be little doubt that the Iranian deputy oil minister’s confident remarks were based on the knowledge of well-advanced, behind-the-scenes developments. 


During the past year, a close observer of the Washington-Tehran divide would have been aware of an ongoing dialog between Iran and several major US oil companies. It is reasonable to assume that this discourse took place under the watchful eye of the US State Department. 


The most overtly pro-Iranian company is Conoco, which earlier Conoco abandoned a $550 million investment in the Sirri oil field most reluctantly, only after a presidential order signed by President Bill Clinton.  


Conoco also helped Iran analyzing seismic data of the Huge Azadegan gas field, claming that it was not violating the sanctions regime by doing so. On December 5, a Conoco vice president, Rob McKee, declared that the energy policy of the United States should be re-examined.  


The United States cannot afford to stay out of Iran, he said, which is a most promising prospecting area. Conoco’s CEO, Archie Dunham himself went on the record stating that he expects the removal of the sanctions within a year no matter who will be the US president.  


Speaking on December 6 in Houston to a Reuters reporter, Dunham declared: “I think that because of the leadership that Conoco has shown with respect to the sanctions, we will be rewarded by the Iranians and we will be given some tremendous development opportunities ahead of our US competition”. 


Conoco has acted to put together a strong oil lobby in favor of removing the US sanctions on Iran, and in its effort it reportedly was assisted by Chevron and ExxonMobile.  


Recently, during a visit to the United Nations in New York, Mehdi Karroubi, the Iranian parliament speaker, met with representatives of Chevron and Conoco.  


On July 12, a Chevron’s vice president, Richard Matzke had declared that US policy towards Iran should change in light of the importance of Iran to the oil market, its unique position in the Middle East, and the boost that would be provided to the US economy if US companies would be allowed to work in that market. 


Conoco is not the only US-connected oil group making concrete steps toward involvement in Iran. BP-Amoco was among the companies invited by the Iranians invited to develop South Pars giant.  


However, it reportedly informed the State Department of every step that it made in this respect. In November Chevron purchased data regarding the project, but it avoided submitting any concrete proposals.  


The US oil majors are keenly aware of what is at stake. Iran’s oil and gas sector is set for significant expansion, and the more politically moderate and pragmatic regime in Tehran is increasingly inclined to invite the participation of outside players.  


This represent a major economic gain, from which US companies currently are denied involvement. Their European competitors, such as E.N.I of Italy France’s Total, are likely to take full advantage of the situation. 


But in the higher echelons of the U.S. government, the powers that be are aware not only of the political risks of doing business with Iran, but also of the economic risks that will come from not doing business with Iran.  


So at present their strategy appears to allow the quiet and sometimes tacit dialog to take place between the major US oil companies and Iran.  


And then, when it becomes more politically opportune to consider dropping the sanctions package, the real fruits of this policy will become apparent. For then it will not be case of being late-comers to the game, but rather one in which the US majors will be standing, fully prepared, at Tehran’s door. – (Albawaba-MEBG)

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