Four oil firms leaving Iran

Four European and one Japanese oil companies are ending business with Iran due to sanctions.

Iranian technicians work in the Azadegan oilfield. The country’s energy sector is under pressure from sanctions. Vahid Salemi / AP Photo

Four of Europe's five biggest oil companies have said they will withdraw from Iran's energy sector, and they may be joined by a Japanese firm, pushing forward Washington's efforts to pressure Tehran over its nuclear programme. James Steinberg, the US deputy secretary of state, said Anglo-Dutch Royal Dutch Shell, France's Total, Italy's Eni and Norway's Statoil had indicated they would end investments in Iran. They would join the UK's BP, the second biggest European oil company, which has already scaled back its investments in Iran.

"These companies have provided assurances they will stop or are taking significant verifiable steps to stop their activity in Iran," Mr Steinberg said on Thursday at a news conference in Washington. He also said the US had imposed sanctions on a Swiss unit of Iran's Naftiran Intertrade Company over its ties to Iran' Revolutionary Guard Corps. The move might be a deciding factor in persuading European companies to divest their Iranian interests, analysts suggested.

Iran is also under UN and EU sanctions over its controversial uranium enrichment programme, which western powers fear is linked to covert nuclear arms development. Tehran has repeatedly denied the allegation. It is preparing for the start-up of the Middle East's first nuclear power plant later this year, on the coast at Bushehr in the northern Gulf. The government insists the country's nuclear programme is intended only for civilian applications such as electricity production and health care.

Akihiro Ohata, the Japanese minister of economy, trade and industry, said Japan's Inpex might pull out of a project to develop the super-giant Azadegan oilfield in Iran. "We have heard it is considering [its options], including exit," he said on Friday, adding that walking away from the project would be a "business decision". Inpex had already cut its stake in the US$2 billion (Dh7.34bn) project to 10 per cent from 75 per cent in 2006, after ceding its role as the oilfield's operator to the state-owned National Iranian Oil Company. Since then, development of the field has ground to a standstill.

Inpex said it had spent ¥12.4bn (Dh544.6 million) on Azadegan so far and had set aside a further ¥6.1bn to cover potential losses on its investment. Yesterday, crude touched a seven-week high above $81 a barrel, reflecting mounting geopolitical tensions and renewed belief that demand for petroleum was rebounding in the US and China, the world's two biggest oil consumers. US government data showed higher-than-expected economic growth and a larger-than-expected decline in unemployment claims.

China's official purchasing managers' index rose last month at the fastest pace since May, signalling that the country's manufacturing sector had resumed its recovery after sputtering in the second quarter of this year. Analysts said a possible coup attempt on Thursday in Ecuador, an OPEC member exporting 300,000 barrels of oil per day, had also pushed crude higher. Police protests in Quito, the Ecuadorean capital, stirred political unrest in the country. But the national petroleum company, Petroecuador, said its operations were unaffected and that the army was reinforcing security at the company's oilfields.

In other oil-related geopolitical news that may reflect rising global unrest, Nigeria's most prominent militant group warned yesterday that explosive devices had been placed at the venue of celebrations marking the country's 50th anniversary of independence. Nigeria is also an OPEC member. In southern Pakistan yesterday, suspected militants set ablaze more than two dozen tanker lorries carrying fuel to foreign troops in neighbouring Afghanistan.