Belarus drops Iranian oil project after rise in US sanctions pressure

Belarus' state-owned Belorusneft decided to withdraw from the $500 million project to develop Iran’s Jofeir oil field due to new data suggesting that the field is less viable commercially than earlier thought, the company said.

“During development work, new data emerged on the geological structure of the field that led to changes of the technical, financial, and economic condition of the project,” said Belorusneft, adding that it decided to exit from the contract “after the first stage.”

Belarusneft said the contract, which was signed in 2007, stipulated that development of Jofeir field would be carried out in several stages, and that, “The possibility to terminate the contract after the end of any stage was stipulated by the contract's provisions.”

However, US authorities in April added Belarusneft to the list of companies that violated sanctions imposed against Iran. The sanctions were imposed due to the $500 million contract signed in 2007 between Belarusneft and Naftiran Intertrade Co. on the Jofeir development.

More pressure emerged on the Belarus firm, and government, earlier this month when Congress's Government Accountability Office identified 16 companies it said were still involved in commercial activity in Iran, including Belorusneft.

The decision by Belorusneft came amid further reports that the US has requested that Japan, Europe, and others to impose additional sanctions against Iran in response to continued activity on its nuclear program.

The sanctions target Iran Air and Tidewater Middle East Co., a major Iranian port operator. The US believes the involvement of both in helping Iran's Revolutionary Guard to illegally ship arms and other military equipment.

The US Department of the Treasury is reported to be “strongly urging” other nations to follow suit in an effort to end Iran's support of terrorism in addition to its nuclear and missile programs.

Europe is expected to comply, but reports indicate that Japan has been noncommittal due to the need to balance diplomatic and economic considerations.

With the repercussions of the Fukushima nuclear accident straining Japan’s power grid, Iran plays an increasingly important role in Tokyo's energy policy, accounting for about 10% of its crude oil imports last year.

After an Iranian official suggested that it might retaliate by restricting exports of oil to Japan, a Japanese official said, “We need to carefully evaluate potential retaliatory action.”

Meanwhile, Iran’s President Mahmoud Ahmadinejad Aug. 16 welcomed Russia’s latest proposals for restarting talks on the Iran’s controversial atomic program that were broken off in January.

“Iran welcomes Russia’s step-by-step proposal and is ready to make suggestions to cooperate,” Ahmadinejad said in a meeting with Russia’s visiting National Security Council Sec. Nikolai Patrushev.

Under the proposal, Iran would address questions about its nuclear activities and the major powers would begin to reduce international economic sanctions against Tehran.

Contact Eric Watkins at hippalus@yahoo.com.

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