Sanctions Against Iran Affect Oil and Gas Companies Worldwide

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Researched by Industrial Info Resources (Sugar Land, Texas)--The United Nations (UN) has leveled new sanctions against Iran in hopes of curbing of the country's self-proclaimed peaceful nuclear program. Other sanctions have banned foreign companies from investing more than $20 million in projects that develop Iran's oil and gas industry.

The petroleum sector accounts for half of Iran's revenue. American congressional investigators reported in April that at least 41 foreign companies have been involved in the development of the Iranian petroleum industry since 2005. Though the Iranian oil minister said in April that the new sanctions would not affect the petroleum sector, many companies named in the investigation recently announced that they will cease operations in Iran. Sanctions related to the oil and gas sector are aimed at preventing money generated by oil and gas development from bolstering the nuclear program. Total S.A. (NYSE:TOT) (Courbevoie, France), Statoil ASA (NYSE:STO) (Stavanger, Norway), Eni SpA (Rome, Italy), and Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands) are companies that have cut ties with the Iranian petroleum sector in order to avoid sanction penalties.

Iran's nuclear program, which was launched in cooperation with the United States in the 1950s, began as a part of Atoms for Peace. Iran signed the Nuclear Non-Proliferation Treaty in 1968 under the Shah, Mohammad Reza Pahlavi. Despite his intentions of replacing petroleum-generated power with that of nuclear power, nuclear cooperation was cut off after the Iranian Revolution removed the Shah from power in 1979. After the revolution, Iran sought to create its own nuclear fuel cycle and enlisted Russia to help during the 1990s. Sanctions were laid down against Iran starting in 2006, following years of failed transparency, the first of the sanctions demanding that Iran cease uranium enrichment activities. Further sanctions froze assets of individuals and organizations linked to the nuclear programs, enforced travel bans on said individuals or members of the linked organizations, and barred exports of goods that could have potential use in the nuclear fuel cycle. The last round of sanctions placed a complete arms embargo on Iran.

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