Iran Tracker

Azerbaijan and Iran near major gas agreement; Indian oil consortium deadlocked over South Pars; and German, Swiss, and Italian companies halt business in Iran: Siemens, ABB AG, and Eni to leave Iranian market after completion of current contracts.

NEW BUSINESS PROJECTS IN IRAN

AZERBAIJAN

(Global Business in Iran country page, background on foreign relations with Iran)

 (January 24, 2010)  Seyyed Reza Kasaeizadeh, head of the National Iranian Gas Export Company (NIGEC), said Iran will sign a long-term agreement on Azerbaijani gas exports within 90 days.  Both countries are currently operating on a short-term, three-month delivery contract.  Kasaeizadeh said that the final contract will increase the amount of imported gas to 2 billion cubic meters per year.  See Global Business in Iran for details. 

(January 30,2010) The State Oil Company of the Azerbaijan Republic (SOCAR) has expressed concern over the economic sanctions recently passed in the U.S. Senate.  The bill, which targets companies that sell refined petroleum or gasoline to Iran, would affect SOCAR, which “occasionally” sells refined petroleum products to Iran.  See Global Business in Iran for details.   

INDIA

(Global Business in Iran country page, background on foreign relations with Iran)

(January 24, 2010)  The Indian consortium of Oil and Natural Gas Corporation (ONGC) and the London-based Hinduja Group, which won a forty percent stake in Phase 12 of the giant South Pars oil and gas field, is disputing how to proceed with the project.  Hinduja wants to split the stake equally between its subsidiary Ashok Leyland Project Services (APLS) and ONGC Videsh Ltd., the overseas arm of ONGC.  ONGC, however, is arguing for a three-fourths stake (10 percent more than that desired by Hinduja), noting that APLS has no experience in offshore exploration and development.  See Global Business in Iran for details.

(January 25, 2010)  The India Oil Corporation, the largest refined petroleum retailer in India, has asked the Indian government for financial aid to become a partner in the ONGC-Hinduja consortium.  The consortium won a twenty percent stake to develop South Pars Phase 12.  See Global Business in Iran for details.   

KUWAIT

(Global Business in Iran country page, background on foreign relations with Iran)

(January 25, 2010) According to Press TV, Kuwait and Iran are in talks to link Kuwait’s gas infrastructure to that of Iran.  Kuwait and Iran would build an undersea pipeline, joining Iran’s pipeline grid via Khuzestan.  Since 2008, Kuwait has shown interest in importing 3-4 billion cubic meters of natural gas each year—as recently as November 2009, Iran’s Oil Minister Massoud Mirkazemi and his Kuwaiti counterpart Sheikh Ahmad al-Abdullah al-Sabah held meetings on the subject in Tehran.  See Global Business in Iran for details.

UNITED ARAB EMIRATES

(Global Business in Iran country page, background on foreign relations with Iran)

(February 1, 2010)  Sharjah-based Dana Gas said that natural gas imports from Iran could “potentially” start after four years of delays.  On the Iranian side, the National Iranian Oil Company (NIOC) had introduced natural gas into the completed upstream facilities for the first time.  After the $1 billion deal, whereby Iran agreed to export natural gas to Sharjah, the U.A.E. faced delays over gas pricing and construction disputes.  Crescent Petroleum owns 21 percent of Dana Gas and will be involved in the physical delivery into the U.A.E. while Dana has contracted to sell the gas locally.  See Global Business in Iran for details.  

UPDATES TO EXISTING BUSINESS PROJECTS

AUSTRALIA

(Global Business in Iran country page)

(February 4, 2010)  The Australian government blocked three shipments to Iran in recent weeks.  While the Australian companies and their exports remain unclear, the government said one shipment contained pumps that could be used to cool nuclear reactors.  Australia exercised the Weapon of Mass Destruction Prevention of Proliferation Act in halting the exports.  Nevertheless, in 2009, Australia's trade with Iran grew to $600 million.  See Global Business in Iran for details.

FRANCE

(Global Business in Iran country page, background on foreign relations with Iran)

(February 1, 2010) Iran-Khodro Company, the largest Iranian automaker, will manufacture the French Peugeot 270i.  Peugeot and Iran-Khodro have long-standing business ties.  Peugeot will provide 50 percent of the investment needed to begin industrial production of the car in Iran.  See Global Business in Iran for details.     

GERMANY

(Global Business in Iran country page, background on foreign relations with Iran)

(February 1, 2010) SieMatic, a German based luxury kitchen cabinet manufacturer has expressed interest in the Iranian and Lebanese markets.  Ten percent of the company’s revenue comes from Middle East operations.  SieMatic is already present in Dubai.  See Global Business in Iran for details.

(January 27, 2010) In a statement following a stockholder meeting, Siemens AG announced it would not accept new contracts in Iran starting in mid-2010.  Last month, British and German authorities intercepted two Siemens shipments of turbo-compressors and Teleperm control processors en route to Iran.  Both technologies are considered “dual use”, though Siemens says its activities in Iran are purely civilian.  Siemens CEO Peter Loescher said that Siemens would eventually leave the Iranian market, but that it would honor existing contracts to avoid financial liabilities.  See Global Business in Iran for details. 

(January 27, 2010) Following a meeting between Benjamin Netanyahu and Angela Merkel, Israel is working behind the scenes to convince Germany to cancel a $1.44 billion deal between an unnamed German company and Iran for the supply of 100 gas turbo-compressors.  The turbo-compressors would be used in the production of liquefied natural gas.  See Global Business in Iran for details.

(January 27, 2010)  Under pressure from Israel, German supply chain logistics consultancy Hamburg Port Consultancy (HPC) is pulling out of a contract to upgrade the Iranian port of Bandar Abbas, signed on 9 January 2010.  Bandar Abbas was used by Iran to load weapons on the Hamburg-based Francop, a vessel intercepted by the Israeli navy late last year.  HPC was to increase handling capacity at the Shahid Rajaie port complex.  Bandar Abbas offloads 90 percent of Iranian container throughput and Iran lacks the technical competency and pool of trained contractors to upgrade port facilities unaided.  See Global Business in Iran for details. 

ITALY

(Global Business in Iran country page, background on foreign relations with Iran)

(February 4, 2010) ENI announced that it would pull out of Iran after existing contracts, including a 1.5 billion euro deal for Phase III of the Darkhovin field, expire. The Italian government controls 30 percent of ENI. See Global Business in Iran for details.

(January 15, 2010) Following an editorial by Guilio Meotti, new details emerged concerning the activities in Iran of the Italian technology company Carlo Gavazzi Space S.p.A.  Meotti, a journalist with Il Foglio, notes that the 2003 deal for two “Mesbeh” communications satellites also included a sizable transfer of aerospace technology, and despite the dual use of such technology, the agreement was fully sanctioned by Rome. 

Responding to Meotti’s article, the Italian Foreign Ministry said that the satellite project was shelved and Italian authorities never granted Carlo Gavazzi export permits.  See Global Business in Iran for details. 

NORTH KOREA

(Global Business in Iran country page, background on foreign relations with Iran)

(January 31, 2010) A large shipment of weapons from North Korea, intercepted in Thailand last December, was destined for Iran according to the Thai government.  The shipment included rockets, fuses, grenades, and “what appeared to be missile parts.”  See Global Business in Iran for details.  

SWITZERLAND

(Global Business in Iran country page, background on foreign relations with Iran)

(January 31, 2010) Swiss engineering firm ABB AG seeks to halt its business activities in Iran.  The company has not taken any new orders in 12 months.  The Zurich-based firm has 30 employees in Iran, down from 100 a year ago.  Many of the infrastructure projects ABB worked on had run into financial difficulties.  See Global Business in Iran for details.

(January 31, 2010) Swiss-based auto parts and textiles firm, Rieter, also announced that it would not take new orders from Iran, noting that its business there was already minimal.  See Global Business in Iran for details. 

(January 31, 2010) Swiss engineering firm Sulzer will not send employees to Iran and is conducting less business than in previous years.  See Global Business in Iran for details. 

(January 31, 2010) Swiss cement maker Holcim has cut its stake in a local Iranian partner.  See Global Business in Iran for details.   

UNITED ARAB EMIRATES

(Global Business in Iran country page, background on foreign relations with Iran)

(January 23, 2010)  An effort by the U.A.E. to stockpile agricultural products may harm trade with Iran, according to reports.  The U.A.E. plans to maintain a three months supply of fifteen agricultural commodities.  Ali Pashang, Chairman of the Iran Trade Center in Dubai said that because of stockpiling, there are few surplus agricultural commodities ready for sale to Iran.  Iran has long relied on the U.A.E. for easy access to international markets.  Some commodities traders weary of the difficulties of doing business with Iran, plan to minimize their dealings with the Islamic Republic.  This may cause Iran to become more reliant on agricultural goods from Brazil, India, and elsewhere.  Trade between Iran and the U.A.E. totaled some $7.62 billion in 2008.[1]  See Global Business in Iran for details.

UNITED KINGDOM

(Global Business in Iran country page, background on foreign relations with Iran)

(February 5, 2010)  U.K.-based Balli Group Plc. agreed to pay a $15 million civil penalty to the U.S. Treasury and Commerce Departments.  In 2007, a subsidiary of the British firm, Balli Aviation Ltd. bought six refurbished Boeing 747s.  Balli Aviation leased three 747s to Armenian Airlines, which in turn rented the planes to an Iranian airline, Mahan Air.  The owners of Balli Group, Hassan and Vahid Alaghband, retain strong business ties to Iran.  See Global Business in Iran for details.    

UNITED STATES

(Global Business in Iran country page)

(January 27, 2010) Texas-based polyurethane producer Huntsman has instructed its foreign subsidiaries to stop selling its products in Iran.  See Global Business in Iran for details.