Iran Sanctions: French Development Bank Drops Its South Pars Oil Field Investment
COUNTERTERRORISM BLOG
By Victor Comras
As a critic of the effete sanctions measures adopted by the international community against Iran, I want to be among the first to recognize a success in the application of US Treasury tactics re foreign banks doing business with Iran. Under pressure from the United States the French Bank of General Development has withdrawn from its commitment to invest some $1.8 billion for the development of the South Pars (SP) oil and gas field development phases 17 and 18. The French Bank had agreed in 2005 to be the lead investor in this project, covering some 85% of its cost. One can only speculate whether this result should be attributed in part, also, to the election of French President Sarkozy, who has already indicated a willingness to adopt harsher measures against Iran, if necessary.
The Iran News Agency ISNA reports that the Government of Iran has decided, in reaction to the French Bank pull-out, to finance the project through special currency reserves. Iran reportedly set up a special Oil Stabilisation Fund several years ago to take advantage of "windfall" profits from its oil exports. The value of that fund is now put at $12 billion, up from $9.469 billion last March.
As I noted in my earlier blogs and recent Congressional Testimony on Iran Sanctions, these are precisely the kinds of measures that can have an impact on Iran's leadership. We need more of the same – bringing home to the international financial community that doing business with Iran is not good business.
The Security Council will again consider new sanctions on Iran next week, and targeting new sanctions that would curtail the availability for funding investment in Iran's important energy sector would be an important step forward. But, the Security Council seems to be locked into the same gradual small incremental step approach that has so far failed to convince the Iran regime to change course. To the contrary, it has convinced Iran's leadership that the international community, and the Security Council in particular, lacks the political will to adopt stringent sanctions measures that might actually have an impact on Iran's leadership.
Let's hope that France's new political leadership, combined with President Bush's call for tougher sanctions, and new commitments for firmer action from the British Government, will also pressure Russia and China to put some real pressure on Iran before it's too late. |
