Russia's LUKoil exits Iran under US pressure

LUKoil Vice President Leonid Fedun said that it was impossible for the company to continue to participate in the Anaran field as long as US sanctions are in force.

The Anaran block in western Iran is estimated to have reserves of 2 billion barrels and was operated by a consortium of Norway's StatoilHydro (75%) and LUKoil Overseas (25%).

According to LUKoil's 2009 financial statements published on March 24, the company took a $63 million impairment loss in December “due to the incapability of undertaking further works because of the threat of economic sanctions of the US government."

Previously, LUKoil had defied US unilateral sanctions, which have no legal standing outside of the US, and said it was resuming its participation in the lucrative project in December 2007.

However, last year it announced plans to build an oil refinery in the US and it is also mindful of a network of 1,600 US filling stations which it owns with Houston-based ConocoPhillips. The company is concerned that these investments may be subjected to punitive action by the US authorities under Iran Sanctions Act. ConocoPhillips is looking to sell half its 10 percent in LUKoil within 2 years.

Under Iran Sanctions Act, non-US companies investing more than $20 million a year in Iran's oil or gas industries could face sanctions in their operations with or in the US. The Act raised the ire of EU, Russian and other administrations for seeking to interfere in the activities of their native companies engaged in lawful business with Iran.

Although seemingly pulling out now for the time being, head of LUKoil's overseas production arm insisted during a March 24 presentation in London that the company was not abandoning Iran altogether.

“We aren't saying goodbye,” said Andrei Kuzyaev as he presented the company's US GAAP statement for 2009. “It's just the principal position of our auditors and doesn't mean that we lose the rights to that project.”

"We have kept our rights to this project and are ready to return to it under a favorable economic situation," added Stanislav Kuzyaev, head of LUKoil Overseas in charge of company's projects abroad.


/Press TV/