US firms shut out of Iran oil tenders

US companies stand no chance of participating in bidding for Iran’s oil fields which the country plans to develop with international help, a senior official says. 

Iran's Deputy Petroleum Minister for Commerce and International Affairs Amir Hossein Zamaninia said Monday that US firms do not face any restrictions for work in the resource-rich country but American sanctions make such activities impossible.

“Iran has not set any limits for these companies. It is rather American laws which have made their participation in Iran’s oil tenders impossible,” IRNA quoted him as saying.

Iran has named 29 major companies from Asia and Europe that have prequalified to bid for oil and gas development contracts in the country where about 70 projects have been defined for implementation.   

Those companies are eager to cash in on last year’s lifting of sanctions against the Islamic Republic, but US firms are still prohibited from trade with Iran under “primary” penalties which are separate from nuclear sanctions.  

“According to primary sanctions of the US Congress, American oil companies cannot work in Iran; hence, they will not participate in the biddings,” Zamaninia said.

The remarks come after Iran’s Minister of Petroleum Bijan Zangeneh said last week that US companies faced no ban for entering the Iranian oil industry. Nevertheless, no American companies have directly applied to work in Iran's oil industry, he added.

President Donald Trump’s anti-Iran rhetoric and new US sanctions on the Islamic Republic have put a further damper on American oil majors’ hopes to scout for opportunities in the Middle Eastern country.

The US government imposed the sanctions in breach of the nuclear accord after Iran successfully tested a ballistic missile.

Zamaninia's remarks are a dramatic climbdown from his earlier vision of “a great potential for engagement and partnership in Iran for American companies” under Trump.

Read more:

Iran official sees US partnership potential under Trump

Negotiations not affected

Zamaninia, however, said the new sanctions did not affect Iran’s negotiations with European and Asian companies which are “still after cooperation." 

“International companies are willing to cooperate but the problem is the slow process of the work being done inside the country,” he added.

Officials have been trying to finalize a new oil contract amid bickering over whether the formula was giving foreigners too much of a free hand to control the country’s national riches.    

US oil companies have always eyed Iran with great interest. ExxonMobil reportedly stationed lobbyists to push the envelope on Iran sanctions as Western companies jostled for opportunities.

Last week, directors from France’s Total were in Tehran with a trade delegation headed by Foreign Minister Jean-Marc Ayrault to assure Iran of Europe’s commitment to the nuclear deal after Trump unveiled his travel ban.

Iran's Ministry of Petroleum said last month Total had officially started the development of South Pars Phase 11 in the Persian Gulf, effectively resuming operations in an Iranian energy project after a seven-year hiatus.

Total sealed a preliminary agreement in November, worth $4.8 billion, to develop Phase 11 of the South Pars at the head of a consortium that includes China National Petroleum Corporation (CNPC) and Iran’s Petropars.

Marzieh Shahdaei, managing director of the National Petrochemical Company, said NPC and Total's senior executives also discussed a petrochemical project for production of ethylene and polyethylene.   

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