Conoco risks US wrath by aiding Iran's oil industry
By GUY DINMORE
September 14, 2000
TEHRAN -- Conoco, the US oil company, has collaborated with Iran on
work to develop one of the world's largest oil fields, despite the risk
of being accused of breaching US sanctions against Iran.
Senior Iranian officials told the Financial Times that Conoco helped
analyse data collected last year by the National Iranian Oil Company (NIOC)
during its exploration of the Azadegan field, on the understanding that
Conoco would be given priority in developing the new field once the US
sanctions are lifted.
Ali Hashemi, who was deputy oil minister at the time and is now chairman
of the parliamentary oil committee, said Conoco had "provided the
technology to further appraise the volume of oil reserves". He said
that he was not aware of any money changing hands and could not judge whether
Conoco was breaking US sanctions.
"Naturally any company that helps in exploration has priority (in
competing for the contract)," Mr Hashemi added.
In a statement Conoco said: "We have seen seismic data from the
field and provided our opinion to NIOC. We do not believe it is in violation
of the sanctions. We looked at the data and provided our opinion on what
President Bill Clinton issued an executive order in 1995 prohibiting
US involvement in developing Iran's oil industry.
He said the "activities and policies of the government of Iran
constitute an unusual and extraordinary threat to the national security,
foreign policy and economy of the US". His order was in direct response
to a Dollars 600m (Pounds 427m) agreement between Conoco and NIOC to develop
Iran's Sirri oil field. The deal was blocked and the Iranian government
handed it to Total of France instead.
Within less than two months, Mr Clinton issued a second order effectively
banning all US trade with Iran, including the export of technology and
NIOC and Iran's oil ministry declined to comment on Conoco's involvement.
One oil executive in Tehran described the Azadegan field in southwestern
Iran as "the jewel in the crown". Analysts estimate oil reserves
in place of 20bn to 25bn barrels.
Conoco, as well as the other leading US oil companies, Chevron and Exxon
Mobil, maintain regular contact with NIOC and lobby against the US sanctions.
"It's no secret that we've maintained a dialogue with NIOC since
1995 in the hope that US sanctions would be lifted at some point and we
would be allowed to do business," said Carlton Adams, Conoco spokesman.
Archie Dunham, Conoco's chief executive, visits Iran regularly to maintain
his relationships with leaders there. He recently won approval from the
US government to travel to Libya to assess large holdings Conoco had to
relinquish after US sanctions were imposed in 1986.
US oil companies argue the sanctions unfairly open the field to their
European, Canadian and Asian competitors, which have signed oil and gas
deals with Iran worth about Dollars 8bn in the past three years.
The deals have gone ahead despite the Iran-Libya Sanctions Act (ILSA)
passed by Congress in 1996 which threatens sanctions against non-US companies
that invest in Iran's energy sector.
The act, however, allows the president to issue waivers, which he did
following pressure from Europe. ILSA expires in August 2001, but neither
the Democrats nor the Republicans have signalled they would move to lift
the executive orders.
Over the past 18 months, reflecting a slow thaw in relations, the US
has eased some restrictions.