Pipeline will help Iran in its nuclear push, so drop plan: US to India

“We believe that Iran is seeking to develop nuclear weapons, and anything that will support that endeavour is something that we oppose,” Bodman said.

The New York Times reported today that the Bush administration has quietly been warning energy companies, including Shell, Repsol and SKS, the Malaysian Oil company, as well as the governments of China, India, Pakistan and Malaysia, that penalties are possible if they pursue energy deals with Iran.

As a result, several huge projects planned for Iran could be vulnerable. These include one possible $10 billion project by Royal Dutch Shell and the Spanish oil company, Repsol YPF, to develop a natural gas field offshore in Iran, and a $20 billion venture by SKS Ventures of Malaysia to produce natural gas in Iran’s Golshan and Ferdows fields.

One factor behind the warnings, administration officials acknowledge, is that the Democratic-controlled Congress appears to be moving quickly to pass a law that would make sanctions mandatory out of concern about Iran’s suspected nuclear arms programme and support for terrorism. “What we’re trying to do is create multiple points of pressure on Iran in both the private and public sector,” said R Nicholas Burns, Undersecretary of State for Political Affairs. “These companies also need to know that the attitude of Congress on their activities in Iran is hardening.”

Last month, the US ambassador to Spain, Eduardo Aguirre Jr., met with Repsol executives in Madrid to advise them against going forward with a deal to develop Iran’s South Pars field, which contains one of the world’s biggest natural gas deposits. The ambassador was told that the deal was not yet final, according to American and Repsol officials.

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