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Total, Shell, Eni to End Iran Investments, U.S. Says

Bloomberg

By Flavia Krause-Jackson and Ali Sheikholeslami – Sep 30, 2010 6:30 PM GMT+0100

Total SA of France, Statoil ASA of Norway, Italy’s Eni SpA and the Netherlands’ Royal Dutch Shell Plc have “pledged to end their investments in Iran’s energy sector,” U.S. Deputy Secretary of State James Steinberg said.

Steinberg said the pledge means the companies are “eligible” to avoid U.S. sanctions. “These companies have provided assurances they will stop or are taking significant verifiable steps to stop their activity in Iran and have provided assurances not to undertake new energy-related activities in Iran that may be sanctionable,” he told reporters in Washington.

The U.S. also announced that it is imposing sanctions on an Iranian energy-trading company operating in Switzerland. The action was taken against Lausanne-based Naftiran Intertrade Co., also known as Nico. The company is involved in the trading of oil and refined products and seeks to invest in energy projects, according to its website.

Iran, the Middle East’s second-largest oil producer, is under international sanctions over its nuclear program, which the U.S. and many of its allies allege are cover for the development of atomic weapons. Iran rejects the allegation and says it needs the technology to advance efforts to generate electricity and for other civilian purposes such as energy and medical research.

‘Direct Impact’

“The nature of the effect we are trying to produce is not to take down the Iranian economy or harm ordinary Iranians, what we are looking at is direct impact on the kind of people who can make significant investments in their energy sector,” Steinberg said.

An Eni spokeswoman declined to comment. Eni Chief Executive Officer Paolo Scaroni said in February that the company would reduce its presence in the country, although it wouldn’t pull out of existing projects.

Total spokeswoman Phenelope Semavoine declined to comment. Statoil and Shell said they would try to offer a comment later, when contacted about the State Department announcement.

Seifollah Jashnsaz, Nico’s managing director, headed the National Iranian Oil Co. prior to this post. Petropars, Petroiran and Iranian Oil Company U.K. Ltd. are subsidiaries of Nico. National Iranian Oil Co. allocated more than 13 projects to Nico for financing in 2009, according to the company’s website.

Calls made to the mobile phone of Ramin Mehmanparast, Iran’s foreign ministry spokesman, and to Nico after working hours weren’t answered.

Tougher Steps

An advocate for sanctions against Iran said the Obama administration should take tougher action.

“I support sanctions against Iranian-government controlled entities operating in Europe,” Mark Dubowitz, executive director of the Foundation for Defense of Democracies in Washington, wrote in an e-mail. “I am disappointed in the Obama administration’s decision to sanction only one company, while ignoring the many foreign energy firms that are violating U.S. laws.”

To contact the reporters on this story: Flavia Krause-Jackson in Washington at [email protected]; Ali Sheikholeslami in London at [email protected]

To contact the editors responsible for this story: Mark Silva at [email protected]

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