FACTBOX-Foreign companies stepping away from Iran

October 20, 2010

Oct 20 (Reuters) – Iran’s day-to-day business is affected by tighter international, U.S. and European Union sanctions imposed in response to Western fears the country’s nuclear activities are aimed at making a bomb. Tehran says it has no such aim.

Tighter sanctions have scared away the Islamic Republic’s usual trading partners, particularly in the oil and gas industry, where the country has been dependant on fuel imports.

Following are key facts on some firms that have been moving away from Iran and on others still dealing with the country:


* United Arab Emirates-based oil and gas explorer Dragon Oil’s has not renewed an oil swap agreement with Iran which expired in July 2010. Under the swap agreement, Dragon used to ship the crude it produces from its offshore development in Turkmenistan to Iran’s Bandar Neka, a port in the Caspian Sea in return for oil from southern Iran.

The company said on Wednesday that it is currently exporting all of its entitlement barrels of Turkmen crude using the “Western Route”, which is through Baku, Azerbaijan.

* France’s Total said it has halted all its trade in oil products with Iran in compliance with a European embargo, after initially resisting pressure from the United States to stop doing business with Iran.

Prior to that in early October the company said it was still buying Iranian crude.

* Traders said Royal Dutch Shell was still involved in Iranian crude purchases while the company said in early October that it was not illegal to lift oil from Iran.  But it was not renewing contracts to supply Iran Air with fuel, an industry source said in July.

* Norway’s Statoil said it was providing Tehran with technical assistance while Italy’s ENI said it would exit Iran only when existing deals expire.

* ThyssenKrupp, Germany’s biggest steelmaker, said on Sept. 23 it would not enter into new contracts with Iran and would terminate existing contracts in support of sanctions policies of Germany, the EU and the U.S.

* Turkish refiner Tupras told the U.S. State Department in August that it had cancelled contracts to supply Iran with gasoline and data showed in September there were no deliveries in August.

* BP confirmed in July it had stopped supplying jet fuel to Iran Air at Germany’s Hamburg airport. BP declined to give a reason for ending the contract, but the halt in supply followed reports Iranian aircraft had been denied fuel because of the latest set of U.S. sanctions.

* Key shipping associations have created clauses in contracts enabling ship owners to refuse to deliver refined petroleum cargoes to Iran.

* Lloyd’s of London said on July 9 it would not insure or reinsure petroleum shipments into Iran.

* South Korea’s GS Engineering & Construction <006360.KS> cancelled a $1.2 billion gas project in Iran on July 1 following the imposition of U.S. sanctions.

* Spain’s Repsol  said on June 28 it had pulled out of a contract it won with Royal Dutch Shell to develop part of South Pars gas field in Iran.

* Malaysia’s Petronas stopped supplying gasoline to Iran, a company spokesman said on April 15.

* Luxury carmaker Daimler <DAIGn.DE> announced plans on April 14 to sell its 30 percent stake in an Iranian engine maker and freeze the planned export to Iran of cars and trucks. The announcement followed similar action by German insurers Munich Re and Allianz.

* India’s largest private refiner, Reliance Industries, would not renew a contract to import crude oil from Iran for financial year 2010, two sources familiar with the supply deal said on April 1.

* Oil trading firms Trafigura and Vitol stopped gasoline sales to Iran, industry sources said on March 8.

* Ingersoll-Rand Plc, a maker of air compressors and cooling systems for buildings and transport, said it will no longer allow subsidiaries to sell parts or products to Tehran.

* Oilfield services company Smith International said on March 1 it was actively pursuing the termination of all its activities in Iran.

* Caterpillar, the world’s largest manufacturer of construction and mining equipment, said on March 1 it had tightened its policy on not doing business with Iran to prevent foreign subsidiaries from selling equipment to independent dealers who resell it to Tehran.

* German engineering conglomerate Siemens said in January it would not accept further orders from Iran.

* Glencore ceased supplying gasoline to Iran in November 2009, according to traders.

* Chemical manufacturer Huntsman Corp announced in January its indirect foreign subsidiaries would stop selling products to third parties in Iran.

* Accounting giants KPMG, PricewaterhouseCoopers, and Ernst & Young declared themselves free of any business ties to Iran.


* China is in talks with Iran to use the Chinese yuan to settle transactions of oil and projects.

* Russia built Iran’s first nuclear power station near the Gulf port city of Bushehr. Iran began loading fuel into the plant on Aug. 21.

* The U.S. Government Accountability Office reported in April that 41 foreign companies were involved in Iran’s oil, natural gas and petrochemical sectors from 2005 to 2009. In a report in May, the GAO said seven of those companies received U.S. government contracts worth nearly $880 million.

These were: Daelim Industrial Company of South Korea; Eni; PTT Exploration and Production of Thailand; Hyundai Heavy Industries of South Korea; and GS Engineering and Construction of South Korea.

* Russia’s Gazprom confirmed in March it was in talks with Iran on developing the Azar oilfield and has also expressed interest in Iran’s giant South Pars field.

* Pakistan’s Foreign Ministry said on June 10 that a $7.6 billion project for export of Iranian natural gas to Pakistan would be unaffected by the imposition of new U.N. sanctions

(Writing by David Cutler, London Editorial Reference Unit; additional reporting by Ross Colvin in Washington, Humeyra Pamuk in Dubai and Ikuko Kurahone in London; Editing by Jon Hemming)

((david.cutler@thomsonreuters.com; +44 20 7542 7968; Reuters Messaging: david.cutler.reuters.com@reuters.net))


Wednesday, 20 October 2010 09:34:12RTRS [nLDE69J1LU] {C}ENDS


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[…] gas industry, where the country has been dependant on fuel imports. Here are key facts on… Financial Regulatory Forum This entry was posted in Global News and tagged away, companies, FACTBOXForeign, From, Iran, […]

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