Test of Bush's Iran sanctions:Iran, ENI Sign $1 Billion Deal
By Ali Akbar Dareini
Associated Press Writer
Saturday, June 30, 2001; 9:01 PM
TEHRAN, Iran –– Iran signed a $1 billion deal Saturday with Italian gas and oil group ENI, a project seen as a test of the Bush administration's stated resolve to punish foreign companies investing in Iran's energy sector.
The deal to develop the Darkhovin onshore oil field in southwestern Iran was the latest to ignore U.S. sanctions on investments in the Islamic Republic. It marks the first by a foreign company of more than $20 million since President Bush took office in January.
The United States has strongly discouraged investment in Iran, which it accuses of sponsoring terrorism. The U.S. Congress's Iran-Libya Sanctions Act, which took effect in 1996, bars U.S. companies from investing more than $20 million in Iran and threatens to punish foreign companies that do so.
Thus far, Washington hasn't followed through on the threat.
"The international community has simply ignored American unilateral sanctions. This deal clearly shows opposition of an international energy company to U.S. sanctions," Iranian Oil Minister Bijan Namdar Zanganeh said.
ENI took a 60 percent stake in the project, with the remaining 40 percent going to the National Iranian Oil Company. The contract is for six years, and is expected to eventually produce 160,000 barrels of oil per day.
The Bush administration had sought a two-year extension of the Iran-Libya Sanctions Act when it came up for a renewal vote last month. The House International Relations Committee voted overwhelmingly to extend the sanctions for another five years.
The deal is a buyback contract. Introduced in 1995, Iran's buyback program skirts the country's constitutional laws, which prohibit foreign companies from taking an equity stake in any of the country's oil and gas projects. Under a buyback contract, foreign companies cannot own equity in a project, but are repaid for their investment once production begins.
ENI is already involved in several ventures in Iran, including the Balal and Dorood offshore oil fields in the Gulf.
© 2001 The Associated Press |
