Halliburton Co., the U.S. oil-services giant until recently headed by
Vice President Richard Cheney, has opened an office in Tehran and operated
in Iran in possible violation of U.S. sanctions.
Since 1995, U.S. laws have banned most American commerce with Iran Halliburton
Products and Services Ltd. works behind an unmarked door on the ninth floor
of a new north Tehran tower block. A brochure declares that the company
was registered in 1975 in the Cayman Islands, is based in the Persian Gulf
sheikdom of Dubai and is "non-American." But, like the sign over
the receptionist's head, the brochure bears the Dallas company's name and
red emblem, and offers services from Halliburton units around the world.
Mr. Cheney's spokesman, Juleanna Glover-Weiss, declined to comment,
except to say that "the vice president is no longer head of Halliburton
and has severed all ties to the company."
But a U.S. official said a Halliburton office in Tehran would violate
at least the spirit of American law. The Treasury Department's Office of
Foreign Assets Control declined to comment on a specific company, referring
inquiries to a Web site summary of Iran sanctions that bans almost all
U.S. trade and investment with Iran, specifically in oil services. The
Web site adds: "No U.S. person may approve or facilitate the entry
into or performance of transactions or contracts with Iran by a foreign
subsidiary of a U.S. firm that the U.S. person is precluded from performing
directly. Similarly, no U.S. person may facilitate such transactions by
unaffiliated foreign persons."
An executive order signed by President Clinton in March 1995 prohibits
"new investments [in Iran] by U.S. persons, including commitment of
funds or other assets." It also bars U.S. companies from performing
services "that would benefit the Iranian oil industry." Violation
of the order can result in fines of as much as $500,000 for companies and
up to 10 years in jail for individuals.
Halliburton spokeswoman Wendy Hall said the Tehran office didn't violate
the Treasury Department's restrictions on foreign subsidiaries of U.S.
firms operating in Iran.
"This is not breaking any laws," Ms. Hall said. "This
is a foreign subsidiary and no U.S. person is involved in this. No U.S.
person is facilitating any transaction. We are not performing directly
in that country." Ms. Hall suggested that other companies were performing
in a similar fashion in Iran but did not elaborate.
The Halliburton brochure in Tehran says the company has performed oil-drilling
services on two offshore drilling contracts in the Iranian sector of the
Persian Gulf. One is the Sirri field, being developed by France's TotalFinaElf
SA, and the other is Phase 1 of the South Pars field, being developed by
an Iranian company. "We are committed to position ourselves in a market
that offers huge growth potential," it says.
Halliburton's Tehran subsidiary opened nearly a year ago, workers in
the building said. At that time Mr. Cheney was Halliburton's chief executive
officer. He was such an outspoken critic of U.S. sanctions policy that
Senate Majority Leader Trent Lott related last week that Mr. Cheney once
called him "to complain vigorously about how we handle sanctions,
unilateral sanctions, and what it was doing to undermine the ability of
American companies to be competitive."
U.S. companies feel left behind in the race to develop Iran's 90 billion
barrels of proven oil reserves, about 9% of the world's total, and its
natural-gas reserves, the second largest in the world. TotalFinaElf, Italy's
ENI SpA and Asian companies have meanwhile ignored U.S. sanctions to sign
up a potential $8 billion in deals since Iran opened up its oil industry
to foreign investment in 1998.
Iranians are convinced that the new Republican administration in Washington
will soon relax a policy that has crippled their economy for years. Already
last year, Washington allowed renewed imports of Iranian carpets, pistachio
nuts and caviar. In January, Secretary of State Colin
Powell told the U.S. Senate that "differences need not preclude
greater interaction, whether in more normal commerce or increased dialogue."
A January meeting in New York brought together Iranian Foreign Minister
Kamal Kharrazi and the chiefs of Exxon Mobil Corp., Chevron Corp. and Conoco
Inc. "The [Iranian] oil ministry is even keeping certain fields back
for the [U.S.] majors ... and is encouraging them very much," said
Ansari, managing partner of Tehran legal advisers Cyrus Omron International.
"A huge amount of investment is necessary for Iran to renovate the
industry. That cannot only come from Europe."
Foreign Minister Kharrazi told the Iranian national news agency IRNA
in January that the time is right for the U.S. to "rectify" its
policies. Foreign Ministry spokesman Hamid Reza Asefi likewise told an
Iranian newspaper that there was a good opportunity for change and that
Iran would give an "appropriate response" if the U.S. lifts sanctions.
"It's in our interest, as well as America's. We can buy anything
we want via Europe. But they know we can't get it from America, so it's
more expensive for us," said one senior Iranian official.
The official said Iran's mainstream conservative and reformist factions
agreed on the basic need to restore relations broken after Iranian students
seized 52 Americans in 1979 and held them hostage in the former U.S. Embassy
for 444 days. Both Iranian factions agreed on what would be said when reformist
President Mohammed Khatami appealed for an end to the wall of mistrust
between the U.S. and Iran shortly after his election in 1997.
The Iranian official said Iran was subsequently upset by U.S. "preconditions"
about discussing American allegations of Iranian backing of terrorism,
nuclear programs and opposition to the Middle East peace process. But he
hoped for a new beginning if Mr. Khatami was re-elected president in June.
A U.S. official in Washington said the U.S. was keen to sit down to
talk with Iranian representatives "anytime, anywhere," but that
Iran refuses to meet unless the U.S. puts aside all of its differences
with Iranian policies.
"It is absurd to say that we have imposed conditions upon any dialogue
with Tehran," the official said. "But at the same time, we're
not going to enter into a bargain with Iran that would have us agreeing
to set aside all the issues that separate us in order to begin to talk."