Iran Nuclear NewsU.K., EU lobby to protect gas project from Iran...

U.K., EU lobby to protect gas project from Iran sanctions

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Wall Street Journal: As Western governments push ahead with unprecedented sanctions on Iran, U.K. and European Union officials have lobbied U.S. lawmakers in recent weeks to ensure that any new Iran sanctions exempt a key BP PLC-led natural-gas project in Azerbaijan.

The Wall Street Journal

By BENOIT FAUCON, ALESSANDRO TORELLO and ALEXIS FLYNN

BRUSSELS—As Western governments push ahead with unprecedented sanctions on Iran, U.K. and European Union officials have lobbied U.S. lawmakers in recent weeks to ensure that any new Iran sanctions exempt a key BP PLC-led natural-gas project in Azerbaijan.

Officials from the British Foreign Office, the EU and BP have confirmed lobbying Capitol Hill lawmakers in recent weeks to ensure that new sanctions don’t block a long-sought $20 billion Azerbaijan natural-gas project in which an Iranian company has a minority stake. The lobbying underscores the challenge Western governments face in seeking to isolate Iran without harming their own energy security and economic health.

At issue is Iranian national oil company Naftiran Intertrade Co.’s 10% stake in the Shah Deniz II natural-gas find, a BP PLC-led energy megaproject offshore Azerbaijan that is critical to EU energy security.

The EU and the U.S. are adopting new measures to isolate Iran and starve it of oil revenues. Yet, lobbying by the U.K. and the EU in December succeeded in persuading U.S. lawmakers to exempt Shah Deniz II from any new sanctions, people familiar with the matter say.

The U.K. supports a policy that “balances the desire to put pressure on Iran over its nuclear program and makes sure it does not have an adverse impact on European economies,” said a British Foreign Office spokesman, who confirmed the lobbying. “It is not a contradiction” to want an exemption for Shah Deniz II and seek stringent sanctions at the same time, he said.

A BP spokesman acknowledged recent discussions on Shah Deniz II as part of the U.K.-based company’s”routine engagement” with U.S. lawmakers. The company remains “in full compliance with applicable sanctions regimes,” including EU regulations and U.S. law, the BP spokesman added.

A halt to the project would be a major blow to a multiyear EU campaign to boost EU energy security. Past payment disputes between Moscow and Ukraine—a transit country to Europe—have prompted the EU to seek with renewed vigor to diversify away from Russia, its largest gas supplier.

Shah Deniz II has been considered the first key supply source to a corridor via which to feed Central Asian gas to Europe. Naftiran is a Switzerland-based subsidiary of state-owned National Iranian Oil Co., with activities running the gamut from crude trading to oil and gas projects. A Naftiran official declined to comment.

 

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