Centre of controversy: Iran's nuclear programme is drawing it closer to being hit by a sanctions regime - which could affect companies active in its upstream play
US 'warning players off Iran projects'
The Bush administration has quietly been warning companies active in Iran, including Shell and Spain's Repsol YPF, as well as the governments of China, India, Pakistan and Malaysia, that penalties are possible if they pursue energy deals with Tehran, according to reports.
A report published this morning in the New York Times claimed that as a result, several huge projects planned for Iran could be vulnerable.
These include the $10 billion South Pars phases 13 and 14, and its tie-in Pars LNG, which involves Shell and Repsol, as well as a $20 billion venture by SKS Ventures of Malaysia to develop gas reserves at the Golshan and Ferdows fields, the paper added.
One factor behind the warnings, administration officials acknowledge, is that the Democratic-controlled Congress appears to be moving quickly to pass a law that would make sanctions mandatory out of concern about Iran's suspected nuclear arms programme and support for terrorism, the Times reported.
"What we're trying to do is create multiple points of pressure on Iran in both the private and public sector," said Nicholas Burns, the Under Secretary of State for Political Affairs told the paper.
"These companies also need to know that the attitude of Congress on their activities in Iran is hardening."
Administration officials said the reason no decisions have been made on whether to invoke or waive sanctions is that the energy exploration deals by Shell, Repsol, China, Malaysia, China and Pakistan are all still in an embryonic stage and that it is better to head them off by using persuasion than penalties, the Times reported added.
A senior European envoy involved in discussions over Iran said that Europeans would be unhappy with US sanctions against private oil companies, but that they also understood the importance of pressing the Tehran government.
"As long as we want to avoid a war with Iran, we have to try sanctions," he said.