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25 Aug, 2015 12:41

BP avoids Iran trade delegation over fears of breaching US sanctions

BP avoids Iran trade delegation over fears of breaching US sanctions

Energy giant BP chose not to join UK Foreign Secretary Philip Hammond on his trip to reopen the British Embassy in Iran due to fears the US government may take legal action against firms doing business with Tehran even after sanctions are eased.

An anonymous source told the Financial Times the oil giant was concerned about how the sanctions regime would be applied in future.

BP is nervous about upsetting US regulators amid ongoing issues over the 2010 Deepwater Horizon oil spill, which saw an estimated 4.9 million barrels of oil pour into the Gulf of Mexico. BP paid a record $18.7bn in fines to the US government in July.

A trade delegation joined the Foreign Secretary on a two-day tour of Iran earlier this week, during which Hammond reopened the British Embassy and met with President Hassan Rouhani in an effort to renew diplomatic relations following the nuclear agreement, which was signed in July.

Rival oil conglomerate Royal Dutch Shell was part of the trade delegation and met with Iranian Oil Minister Bijan Namdar Zangeneh and Central Bank Governor Valiollah Seif during the trip.

Oil giants Total and Eni have also met with Iranian officials to discuss working in Iran, which holds 9.3 percent of the world’s oil reserves and 18.2 percent of the world’s natural gas reserves.

BP’s absence was conspicuous given the company’s history as the Anglo-Persian Oil Company and later the Anglo-Iranian Oil Company (AIOC). In 1951, a radical nationalist majority in the Iranian parliament voted to nationalize AIOC’s assets in the country without compensation.

This week, BP said: “Sanctions are still in place and we will not do anything while that is the case. We are monitoring the situation and will take a look at the opportunities.

Hammond said he expected sanctions to be lifted as early as next spring and is keen for the UK to exploit commercial opportunities in Iran.

The Foreign Secretary discussed British trade in his meeting Rouhani and added that “business negotiation can start to take place well ahead” of sanctions being lifted.

According to former Conservative Chancellor Norman (now Lord) Lamont, banks are still unwilling to lend to companies doing business with Iran in fear of US prosecution.

He told the Financial Times: “Even when sanctions are removed — if they are removed — some will remain.

This means that the US regulatory authorities may still enforce country sanctions on institutions outside the US. And even if not, there will be the danger that banks will fear that they will run the risk of being pursued by the US authorities.

The British government has faced criticism over its motives for eagerly engaging in trade talks with Iran.

The communist Tudeh Party of Iran has suggested the UK’s main goal was exploiting Iran’s lucrative natural resources and markets.

A Tudeh representative told the Morning Star: “In general, we think that it is important that Iran should have diplomatic ties with all countries of the world.

However, these should be on the basis of equal, open and transparent relations and without interference in the internal affairs of each other.”

The party representative highlighted the irony of Britain reopening its embassy in Tehran on the 62nd anniversary of the 1953 coup, when MI6 joined the CIA in overthrowing democratically elected Prime Minister Mohammad Mossadegh after he began nationalizing oil reserves.

The representative expressed concern that Britain seeks oil and gas deals “without any regard for the rights, interests and well-being of the Iranian people.”

Britain has orchestrated several coups d’etat in Iran over the past century, beginning with the 1921 Persian coup which saw the installation of Reza Pahlavi as Shah.

During World War II, the UK and Soviet Union invaded Iran and exiled Reza Shah in order to secure oil supplies for the Allied war effort against Nazi Germany. Reza’s son Mohammad Reza Pahlavi was installed as the new shah in 1941.

Mohammad Reza assumed greater power as a result of the 1953 coup and his authoritarian governance set the conditions for the Islamic Revolution of 1979, which forced him into exile.