The Black Gold Rush

Iran’s oil ministry released a report earlier this week listing 29 foreign companies that they will allow to bid on Iranian oil and gas projects under the Iran Petroleum Contract model. The list includes Shell (Netherlands), Total (France), Gazprom (Russia), Eni (Italy), and Petronas (Malaysia), along with companies from China, Austria, and Japan, among others. Not surprisingly, there were no American companies listed.

Among the notable absentees was British firm BP, which earlier this week announced that it would opt out of applying for any of the new contracts in Iran. Officially, BP representatives claimed their reasons for staying out of Iran were purely commercial, but unofficially there is intense speculation that the decision has more to do with the uncertainty surrounding the incoming Trump administration’s intentions for Iran.

BP is a British-based firm, but it has extensive roots in the United States and is currently headed by an American, Bob Dudley. Independent U.S. sanctions against Iran (i.e. sanctions that remain in place even after the implementation of the nuclear accord) bar American citizens from doing business in Iran.

There is an enormous amount of money at stake here. Iran is hoping to attract $200 billion of new investment in the oil and gas sector over the next five years, according to its latest development plan. The election of Donald Trump and the subsequent intensification of American hostility toward the Islamic Republic all but guarantee that the United States will not see any of the benefits of this process. Additionally, the entrance of these international firms into major development projects in Iran means that any attempts to reinstitute economic sanctions will face fierce resistance from the countries which stand to reap the financial rewards from these contracts. It’s worth noting, as well, that there are companies on this list from three of the five countries who hold permanent seats on the United Nations Security Council: France, Russia, and China.

Once the gold rush starts, it will be incredibly difficult to stop.

Author: Jonathan Leslie

PhD candidate at School of Oriental and African Studies (SOAS) in London.

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