Mikaila Adams
OGFJ Associate Editor
Move comes weeks after US House passes Iran Sanctions Enabling Bill
Recently, in the wake of recent revelations concerning Iran’s nuclear program, the US House of Representatives overwhelmingly passed legislation aimed at increasing economic and political pressure on Iran to give up its nuclear ambitions. The bill, H.R. 1327, the Iran Sanctions Enabling Act of 2009, was approved by a vote of 414-6 allows state and local governments to divest from companies doing business in Iran's energy sector.
H.R. 1327 provides federal authority to state and local governments to divest their assets from, or prohibit investment of their assets in, any company that:
• invests $20 million or more in the energy sector in Iran;
• provides oil or liquefied natural gas tankers or products used to construct or maintain oil or natural gas pipelines in Iran;
• or extends $20 million or more in credit to be used for investment in the energy sector in Iran.
International company ties
While US-based companies are already barred from doing business with Iran, many foreign companies continue to deal heavily in Iran’s energy sector. The passing of the bill is seen as a criticism of firms such as Statoil ASA (STO), Total SA (TOT), Vitol Holdings BV, Royal Dutch Shell, Eni and Petroleo Brasileiro SA. All are believed to be currently conducting energy business in Iran.
That is, until recently.
Recently, Statoil announced its obligations at the Khorramabad block have ended and that, in the current situation, the company has no current plans to reinvest in the country.
Statoil was involved in seismic-related activities at the National Iranian Oil Co.-owned Khorramabad block, but the those activities were said to have ended before 2009. Currently, no plans are in place to drill an exploration well.
Work is also suspended on the Anaran field in Iran.
Another project of note involving Statoil in Iran is South Pars.
In December 2002, Statoil, under an agreement signed with Petropars and the National Iranian Oil Co., was named offshore operator with responsibility for managing jacket, platform and topside fabrications, sub sea piping, single point mooring and drilling of the development wells during phases 6 through 8 the project.
South Pars ranks as the world’s largest offshore gas field and extends from the Iranian sector into Qatari waters. Recoverable reserves in South Pars are estimated at 14 trillion cubic meters of natural gas and 18 billion barrels of condensates.