Total, Shell keep line open with Tehran despite U.S. claim: sources
October 10, 2010 - 0:0
LONDON (Dow Jones)--Total SA and Royal Dutch Shell PLC discreetly contacted Iranian authorities last week, seeking to reassure the Islamic Republic after telling the U.S. they have no plans for further investments for now, people familiar with the matter said in recent days. Total and Shell contacted Iran as the U.S. announced commitments by the companies ""to terminate their investments and avoid any new activity in Iran's energy sector."" The disclosure was made by the State Department in a Sept. 30 press release, which also said Statoil ASA and Eni SpA had made similar commitments. Though the two companies are not breaching any sanctions in communicating with Iran, the contacts suggest they have not renounced their long-term ambitions in Iran, which hosts the world's second-largest natural gas resources and stands as the fourth-largest global oil exporter. Immediately after the U.S. announcement, a Total manager contacted the Iranian authorities to reassure them the French oil major had no intention to discontinue its business ties with the Islamic Republic, a person familiar with the matter told Dow Jones. While U.S. sanctions have long barred oil investment in Iran, European countries like France have traditionally opposed sanctions. That enabled Total, Shell, Eni and Statoil to develop Iranian oil and gas fields and produce petroleum in Iran. This changed when the European Union this summer announced sanctions barring European companies to invest in the country's hydrocarbons sector. Total and Shell still do some direct business with Iran, regularly buying crude oil from the Middle Eastern country. But the Anglo-Dutch oil company has come under pressure for the trades, which are not prohibited under European sanctions. In July, Total Chief Executive Christophe de Margerie criticized the U.S. embargo on petrol products was an ""error"" that would harm ordinary people. Shell hasn't commented on sanctions beyond saying it would comply with them but has stressed the importance of Iran's resources to global energy security.