Govt to back cos that face US sanctions for investing in Iran

India will protect economic interest of its oil companies from being impacted in the eventuality of US sanctions against them for investing in Iran, Petroleum Minister Dharmendra Pradhan said on Monday.

Pradhan made the comments after Government Accountability Office (GAO) of US named Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and Oil India Ltd (OIL) along with two Chinese firms for having energy ties with Iran, an act for which it can impose sanctions against them.

“India will take its own stand, independent diplomatic stand on the issue,” he said. “Certainly economic interest of our companies and country will be priority.” He, however, refused to elaborate saying such issues cannot be discussed through media. The US Iran Sanctions Act provides for steps against persons, including foreign firms, investing more than $20 million in Iran’s energy sector in any 12-month period.

According to GAO, the US has not imposed sanctions on any firm for their Iran energy ties since 1998. The US and its allies have pursued the sanctions route to isolate Iran over its alleged nuclear programme.

The three firms have been named for their stake in the Farsi offshore block in Iran. “Looking at the diplomatic complexity of the whole issue, we will look at ways how our companies wont be affected by any adverse situation,” Pradhan said. ONGC, IOC and OIL have been named for having 40 per cent, 40 per cent and 20 per cent interest respectively in the Farsi block.

All the three firms gave similar response to US GAO saying the “exploration contract (for Farsi block) expired in 2009” and that they had “not carried out any activity after 2007 in the Farsi Block”.

OVL, IOC and OIL explored for oil and gas in Iran’s Farsi block and proposed investing $5.5 billion to produce gas from the 21.68 trillion cubic foot discovery they made in the offshore area located near the Saudi Arabian border.

They, however, haven’t invested in the development due to differences over the contract with the Iranian government.