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Halliburton coy on Iran gas
deal
By Andrew Tully
WASHINGTON - Details of the gas agreement
are sketchy, but it likely involves a Halliburton
subsidiary based outside of the United States and
the Iranian companies Oriental Kish and Pars Oil
and Gas.
Halliburton spokeswoman Wendy
Hall on Monday appeared to distance the company
from the deal. She was quoted as saying Oriental,
not Halliburton, signed the main contract.
Halliburton, in turn, would likely provide
sub-contracting services. This would be through a
Halliburton subsidiary registered in the Cayman
Islands as Halliburton Products and Services.
Akbar Toran, managing director of Pars Oil
and Gas, said Halliburton and Oriental Kish were
awarded the development contracts for Phase 9 and
Phase 10 of South Pars. The deal was estimated at
US$310 million. A Pars Oil executive quoted by the
Iranian daily Shargh said Halliburton did not
formally participate in the tender. Instead,
Halliburton operated through Oriental Kish.
When the gas field becomes fully
operational, it is expected to generate 50 million
cubic meters of treated natural gas per day for
domestic use, 80,000 barrels of gas liquids per
day for export and a million tons of ethane for
the petrochemical industry.
Such an
arrangement would not necessarily contradict US
law. The United States has tough rules against
companies doing business in Iran, which it accuses
of sponsoring terrorism. But companies are
permitted to deal through their subsidiaries as
long as the work is kept separate from the parent
company.
Analysts say that the agreement
may be more than just business and part of a
larger diplomatic effort to convince Iran to
abandon plans it may have to develop nuclear
weapons.
Sean Murphy, a law professor at
George Washington University, told RFE/RL that US
laws that prohibit firms from working in certain
countries usually allow for exceptions to serve
diplomatic ends. He said the US may be using the
Halliburton deal to send a positive signal to the
Iranians.
"The way these sanctions regimes
are set up, you ban a scope of activity, but then
you give the executive branch the ability to carve
out exceptions as needed - typically on national
security grounds. That makes sense, if you're
talking about certain types of aid that might be
provided or if you're trying to do 'carrots and
sticks'. That is the way that statute is
structured," Murphy said.
While there has
been no official confirmation of this, Murphy said
Halliburton or its subsidiary could serve as a
conduit for back-channel contacts between
Washington and Tehran. "There's probably some kind
of 'dance' going on here relating to the nuclear
issue. The Europeans, as you know, have been at
the forefront of negotiating that with Iran. The
US has been pretty hostile generally and has been
more interested in wielding the stick rather than
the carrot. But there's all kinds of discussions,
I am sure, going on behind closed doors - you
know, the Europeans, the US, and Iranians," Murphy
said.
Halliburton's reluctance to be
identified with the project is understandable. The
company has been criticized in the past for doing
business in Iran. In addition, it is under
investigation for allegedly paying bribes in
Nigeria and overcharging the US military in Iraq.
The criticism has been especially keen
because of the company's links to the
administration of President George W Bush. Bush's
vice president, Dick Cheney, served as
Halliburton's chief executive until 1999, when he
became Bush's running mate.
Some say those
links make the company an especially bad choice to
serve as any kind of informal conduit of US
policy.
Judith Kipper, the director of the
Middle East Forum and Energy Security Group at the
US Council on Foreign Relations, points to
Halliburton's history of wrongdoing. She said
Cheney's former affiliation with Halliburton makes
matters worse because it raises the question of
who ultimately will benefit. Kipper recalled that
more than 30 years ago, the US and China made
their first diplomatic overtures by permitting
their table-tennis teams to compete against each
other. This famously became known as "ping-pong"
diplomacy.
"I don't like the idea that it
would be Halliburton. If [the Bush administration]
wants to do something like ping-pong diplomacy,
I'm all for it because I think we need to engage
with Iran. But I have - would have - a lot of
questions if the company that is going to profit
from this be used somehow as a diplomatic liaison.
This is probably not going to help the United
States. It's going to hurt, because it will be
criticized," Kipper said.
Voices within
Iran are already using the agreement as a way of
criticizing US policy. The Tehran-based daily
Hamshahri wrote that the deal proves US companies
don't respect their own laws and that US sanctions
are not effective.
Copyright (c) 2005,
RFE/RL Inc. Reprinted with the permission of
Radio Free Europe/Radio
Liberty, 1201 Connecticut Ave NW,
Washington, DC 20036. |
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