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2 SPEAKING
FREELY A steady squeeze on
Tehran By Amandeep Sandhu
Speaking Freely is an Asia Times
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As the conflict over
the British hostages held by Iran plays out,
another conflict is taking place in the boardrooms
of banks and oil companies. The United States is
leading a quiet charge, focusing
on
the Iranian financial and energy sectors.
While the US has had sanctions in place
against Iran since the Iranian revolution in 1979,
there is a new, pointed sanctioning aimed at
starving Iran of capital. The US is waging a quiet
campaign on the Iranian economy by starving it of
capital by pressuring global oil companies and
financial institutions.
Oil companies
targeted The US is increasing pressure by
targeting the investment of foreign oil companies
in Iran's oil and gas sector. While the US has
objected to investments in Iran's energy sector
for a long time, it has become energetically
active in countervailing all energy investments in
the past few months.
During the first two
days of February, Iran convened a conference in
Vienna to offer 17 new oil blocks on the market.
In the two weeks leading up to the conference, US
officials intensively lobbied oil and gas
companies not to invest in Iran. Despite these
efforts, more than 200 representatives from 59
different non-US international companies attended
the conference. [1]
In the week preceding
the conference, Anglo-Dutch Shell and Spanish
Repsol co-signed a US$10 billion agreement based
on a framework agreed in 2004 for the development
of the South Pars gas field. A US State Department
spokesperson responded by indicating an
investigation of Shell. Shell, in turn, reiterated
the legality of the deal under European law while
warning investors that it might face sanctions in
the US. [2]
The French company Total SA -
which also participated in the Vienna conference -
indicated that although it is listening to the US
arguments, the company is not obliged to respect
US law. [3]
In February also, the US
ambassador to Spain, Eduardo Aguirre Jr, met with
Repsol executives to warn them about the "delicate
situation" about investing in Iran. While Aguirre
did not call for the cancellation of the deal that
Repsol had co-signed with Shell, he did call for a
delay until the financial pressure on the Iranian
regime results in a change in regime behavior. [4]
Brazilian Petrobras along with Repsol
began partnering with the National Iranian
Drilling Co in drilling three oil wells in
February. The eventual aim of the project is a
$470 million drilling contract. During a meeting
with Petrobras's president, the US ambassador to
Brazil, Clifford Sobel, warned of complications
for Petrobras's US operations in the Gulf of
Mexico if the company went ahead with the Iran
project. [5]
Subsequently, the issue was
raised by the United States at the Brazil-US
meeting last Saturday, with President Luiz Inacio
Lula da Silva reaffirming Brazil's right to pursue
commercial activities in Iran.
Last month,
Daniel Sullivan, the US assistant secretary of
state for economic, energy and business affairs,
met with Norwegian Oil Minister Odd Roger Enorksen
to talk about Norwegian investments in Iran.
Statoil, the largest Norwegian company, has held
talks with US officials about investments in Iraq.
Subsequently, in its filing with the US Securities
and Exchange Commission, Statoil indicated that it
could be sanctioned for the 2002 deal in which it
received 37% of the South Pars gas license. Since
the end of last year, Statoil has invested $394
million in the project. The Norwegian oil
minister, however, indicated that the decision to
invest in Iran is a commercial one to be decided
by the company rather than the Norwegian
government. [6]
In January, Malaysia's SKS
Ventures signed a $16 billion agreement to develop
two Iranian gas fields, Golshan and Ferdows. In
return, a subsidiary of SKS offered Iran a $2
billion share in a refinery it is constructing in
Malaysia. [7]
Although Tom Lantos,
chairman of the US House of Representatives
Foreign Affairs Committee, is pressuring the Bush
administration to stop the ongoing
free-trade-agreement talks with Malaysia, the
Malaysian government has stood behind Iran
investment.
Lantos is also unrelenting in
pressuring the Indian government to cancel the $7
billion Iran-Pakistan-India (IPI) gas-pipeline
project. Both US Ambassador to India David Mulford
and recently Samuel Bodman, the visiting US
secretary of energy, have warned the Indian
government about the IPI project. Subsequently,
however, Indian Defense Minister Pranab Mukherjee
has indicated that the pipeline project will
proceed.
The US has also issued warnings
to China, Japan and Pakistan to desist from
investment in Iran. Japan's Nippon Oil, the
largest oil importer from Iran, has indicated that
it will reduce the amount of crude imported from
Iran by 15%. [8]
Pressure on banks and
divestment The second point of pressure on
Iran is via cutting off Iran from the global
financial system by pressuring banks and
businesses. Last September, the US cut off one of
largest Iranian banks, Bank Saderat, from access
to the US financial system. In January another
Iranian bank, Bank Sepah, was designated as
helping proliferation of weapons of mass
destruction and was cut off from the US financial
and commercial system.
It is one thing to
cut off banks from the US financial system, but
this in turn forces other banks to cut off their
connections with Iranian businesses, as these
banks do not want to risk their own access to the
US-centered global financial system. And they have
been pushed along by a campaign begun last July in
which US Treasury officials met with more than 40
banks to pressure Iran. Most of these banks have
since either completely cut off business with Iran
or rolled back their exposure. [9]
In a
recent Dubai conference attended by the heads of
Middle East businesses, US Under Secretary for
Terrorism and Financial Intelligence Stuart Levey
warned the businesses to worry about the risks of
doing business with Iran. Levey, whom
neo-conservative Frank Gaffney praises for
pursuing "Reaganesque economic and financial
measures" [10] against Iran, hailed the
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