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22 Oct, 2007 15:23

Lukoil bemoans Iran sanctions

The Deputy President of Lukoil, Russia's largest oil company, has revealed it's missing out on several lucrative projects in Iran because of U.S. sanctions against the country's regime.

Leonid Fedun, along with ConocoPhillips Executive VP William Berry, told a Moscow conference on Russia-U.S. relations that politics is holding back growth.

Mr Fedun says U.S legislation restricts investment in Iran for companies which have significant operations in America.

“We have opened a large field in Iran together with Norway's Norskhydro but we can't work there, and can't invest due to American legislation prohibiting investment over $US 20 MLN. Iran has proposed several large projects to us and to Gazprom but neither of us can participate in Iranian projects,” Mr Fedun said.

A Lukoil-ConocoPhillips joint venture in Iraq has also stalled because of the political situation.

With rising oil prices and growing political interest in the operations of the oil companies, business is stressing the importance of making decisions on a sound commercial basis.

The strong relationship between Lukoil and ConocoPhillips reflects that.

“It's a strong relationship developed from CEO all the way through all organisation that we continue to look for opportunities to work together here in Russia as well as in other countries. We have announced a joint venture we are working on with Lukoil in Iraq looking at the west corner field. But there are other countries where we will continue having dialog with Lukoil,” stressed William Berry, ConocoPhillips Executive VP.

Lukoil has almost finished re-branding its 2,000 petrol stations in the U.S. and is considering further development plans, and it's currently weighing up whether the downstream market there or the potential in Iran is more promising.