With five leading Indian firms under the American scanner for doing business with Iran's oil and gas sector, the Manmohan Singh government might soon have to walk its talk on opposing sanctions on the Islamic Republic.
In a week in which the House of Representatives voted to speed up the process of reconciling its anti-Iran bill with the version passed by the Senate, the United States Government Accountability Office (GAO) made public a report naming the five Indian companies as part of a list of 41 foreign firms helping Iran develop its oil and gas sector.
The Indian companies named are the Indian Oil Corporation, Oil and Natural Gas Corporation, ONGC Videsh (OVL), Oil India Limited and the government-sponsored private company, Petronet LNG. In addition, the U.K.-based Hinduja group is listed.
The list was compiled by the GAO through open source information and a confirmatory questionnaire sent to every company concerned. None of the Indian firms replied.
“IOC, OVL, OIL and ONGC are engaged in the development of the Farzad-B natural gasfield in the Farsi block and South Pars assets with an estimated investment of $5 billion,” the report says. The Hindujas are also part of one of the South Pars projects with ONGC, but that relationship has still to gain stability. In any event, this particular venture has yet to take off fully.
Reliance Industries, which is not part of the list because it has not taken up any infrastructure project, was one of Iran's main suppliers of petrol and diesel till 2009. The company reportedly backed out of that lucrative trade after U.S. legislators called for an investigation into a $900-million U.S. Ex-Im Bank loan guarantee for one of its refineries.
In 2007, Essar was scared off a steel project in Iran after Minnesota threatened to withdraw a small subsidy the company was getting for taking over a plant in the State.
Though India has not so far objected to the manner in which Washington's policies have targeted its firms, silence may no longer be an option in the face of attempts to sanction major public sector giants for investing in Iran or selling it refined products, as Mangalore Refinery and Petrochemicals Limited did in 2008.
Though the report does not pass judgment on any company, it notes the provisions of the Iran-Libya Sanctions Act, which allows the U.S. to penalise companies from third countries which invest more than $20 million in the Iranian hydrocarbon sector.
The Chinese National Petroleum Corporation was reported to be financing an oilfield in an agreement with the Iranian government estimated to be worth more than $2 billion. Daewoo Shipbuilding of South Korea was reported to be building tanker ships for Iran under a $384-million contract.
A number of companies, including Royal Dutch Shell, Siemens, Ingersoll Rand and Petronas, have recently announced that they would end or curtail their operations in Iran.
