No Iran role, oil PSUs tell US

No Iran role, oil PSUs tell US
Three state-owned oil sector companies have notified the US government that they are at present not involved in any project in Iran, notwithstanding New Delhi’s professed defiance of the unilateral sanctions imposed by the US on the Islamic Republic.

Indian Oil Corporation, Oil India,  and Oil and Natural Gas Corporation notified the US Government Accountability Office (USGAO) over the past two months that their contract for exploration at the Farsi Block of Iran had expired in 2009 and they were not presently involved in any activities in the Islamic Republic.

The move by the three PSUs is apparently intended to get them dropped from the US government’s lists of foreign companies active in Iran.

The move is likely to upset Iran, but may pave the way for the three PSUs to enter into commercial deals with US entities. The move is significant, as it came in the interval between Prime Minister Narendra Modi’s tour to Washington DC last September, and the forthcoming visit of US President Barack Obama to New Delhi.

With both Modi and Obama keen to boost energy ties, the US President’s visit may see New Delhi prodding Washington to grant a special status to Indian oil sector PSUs to enable them to strike deals for importing liquefied natural gas from the US, without requiring the two countries to sign a bilateral FTA.

US laws at present allows LNG exports only to countries with which US has inked FTAs. The companies of other countries can import LNG from a particular project in the US only after securing a waiver from Washington. GAIL has been granted waivers to import LNG from two projects in US.

New Delhi, however, hopes that ONGC, IOCL, and OIL would also be able to strike commercial energy deals with entities in US. The three PSUs took the initial steps by notifying the US GAO that they were no longer involved in any project in the energy sector of Iran.

A US GAO report published on January 13 noted that the 2013-14 annual reports of ONGC, OIL and IOCL had respectively mentioned 40 per cent, 20 per cent, and 40 per cent participating shares in the Farsi Block.

The US report, however, also noted that all three companies had notified that their exploration contracts had expired.   

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