Royal Dutch Shell Plc  .com Rotating Header Image

Petroleumworld.com: US warns Shell, China, Malaysia companies vs Iran investments

Platts
Washington
Petroleumworld.com 03 22 07

The US State Department has held discussions in recent weeks with top officials of Shell, and companies from Malaysia and China to warn them against moving forward with energy investments in Iran, State Under Secretary Nicholas Burns told a Senate panel Wednesday.

“We’ve gone to the CEOs and major financial officers to say this [potential investment] is a bad idea,” Burns told the Senate Banking Committee, which was holding a hearing on the effectiveness of US sanctions on Iran. “We’ve been jawboning them. We have told them they will be subject to our law,” the Iran Sanctions Act, which threatens reprisals against foreign companies doing energy deals worth more than $20 million with Iran.

Alabama Senator Richard Shelby, the highest ranking Republican on the panel, responded that he was pleased with the warnings, but that “to be effective, [the companies] have to believe you.”

US companies are prohibited from investing in Iran under unilateral sanctions, and laws have been on the books since the mid-1990s seeking to prevent foreign energy investment in Iran’s energy sector by threatening reprisals. But the US has never acted to penalize foreign companies despite several high-profile investments in Iran in the past decade.

Committee Chairman Christopher Dodd, Democrat-Connecticut, pointed out that more than $26 billion in energy contracts have been signed since the sanctions, which have resulted in more than 1.3 million b/d of production. “That’s not a modest amount,” he said. “If these tools [to penalize foreign companies] are available, why aren’t you using them?”

Burns said he believed the Iran Sanctions Act, and its predecessor, the Iran-Libya Sanctions Act, has been “useful in deterring some investment, but not all,” as is evident in the number of deals that have been done.

“Essentially, it’s useful as a deterrent. The problem comes in application,” he said. Burns said one problem is that the US does not want to focus penalties on its allies, when it is Iran that should face sanctions, Burns said.

–Cathy Landry, [email protected]

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “Petroleumworld.com: US warns Shell, China, Malaysia companies vs Iran investments”

Leave a Comment

%d bloggers like this: