Thursday, February 28, 2008

Chevron to Coach China's CNOOC on Iranian Gas Fields

How does a huge international oil and gas company get around international sanctions to establish new production fields? China's CNOOC works to nail down a $16 billion agreement to develop Iran's North Pars gas field amid U.S. sanctions on Iran. The Jerusalem Post reported:

In Washington, State Department spokesman Thomas Casey said the State and Treasury departments would likely look into whether the deal breaches the US sanctions law. As a company with shares listed on the New York Stock Exchange, CNOOC Ltd. would be subject to that law.

"As a matter of general policy, we don't believe now is the time to be making new investments in Iran, whether that's in the energy sector or in anything else," Casey said at press briefing Wednesday.

"There is specific legislation that does cover and potentially sanction investments made in Iran's oil and gas sector," Casey said. The announcement of a preliminary deal on the North Pars gas field in 2006 prompted Washington to demand an explanation, and a warning that such a contract might trigger penalties under the sanctions law.

CNOOC should contact Chevron and Total SA. They were able to develop a gas field in Burma while the country was under international sanctions. While Buddhist monks got their skulls cracked, these two western companies continued provided the ruling junta millions of dollars. George Bush's sanctions got nowhere close to shutting Chevron's spigot in Burma. Those hundreds of millions in greenbacks continue propping up the brutal gang of military generals.

But there may be another reason not to develop anything new in Iran. Israel could well bomb it. Not long ago, a Kuwaiti leader shared his expectation that Israel will take care of the Iranian nuclear threat. If so, expect the U.S. to stand strong to contain any blowback.