Playing an Oil Game With Iran

Fire of Liberty

You know that the Iranian government is starting to make things worse for themselves with regards to their refusal to stop their quest for nukes when various European and world oil and natural gas companies call off energy talks/deals with the mullahs. According to Thomas Catan and Roula Khalaf's Financial Times article "Oil groups shun Iran over fears of embargo," these companies are being scared off from dropping loads and loads of money into Iran because the UN might slap sanctions on Tehran thus freezing them out of their oil and LNG. Here's a sample of what's afoot in Europe and elsewhere:

BG, the UK-based gas company, held preliminary talks last year with Iran over participation in a liquefied natural gas project, but has since abandoned the effort. South Africa's Sasol, which was talking to Iran about building a gas-to-liquids plant, has also dropped its plans.

European companies such as Royal Dutch Shell, the Anglo-Dutch energy group, and Total of France, are still ostensibly in discussions with Iran over large LNG investments. But the companies are unlikely to commit the huge sums needed as long as the political tension continues.

An official from a company that has decided to put its plans on hold said: "“Obviously, regarding political considerations, geopolitical concerns, it hasn't been taken forward because you can'’t make a firm commercial decision on things."

Iran badly needs foreign technology and expertise to maintain oil production and develop its natural gas reserves, the second-largest in the world. The country has ambitious plans to build four LNG projects with partners including Total, Shell, Repsol of Spain and perhaps Gaz de France.

Now I know that these companies are only in it for the deals and would be willing to work with the mullahs had the folks in the UN Security Council not been talking about Iranian sanctions but it still shows you that they know things are getting dicey with Iran. Though I'm guessing the mullahs could care less what the West does, they'll eventually see that all of the oil and LNG they're sitting on doesn't mean a thing when folks aren't willing to give them money(That's if China and Russia don't play some tricks in the Security Council)because of sanctions. Let's hope that this hit on their pocketbook creates some movement on the mullahs giving up their nukes but I'm guessing it'll require knocking the mullahs off their thrones.