IOC, ONGC, OIL among five cos named by US administration for Iran ties

The three Indian firms have been named for their stake in the Farsi offshore block in Iran

State-owned ONGC, IOC and OIL are among the five global companies named by the US administration for having energy ties with Iran, for which they can face sanctions by America.

The US Government Accountability Office has named Oil and Natural Gas Corp (ONGC), Indian Oil Corp (IOC) and Oil India Ltd (OIL) along with China's CNPC and Sinopec as "foreign firms reported to have engaged in commercial activity in Iran's energy sector between November 8, 2013, and December 1, 2014".

The US Iran Sanctions Act provides for steps against persons, including foreign firms, investing more than $20 million in Iran's energy sector in any 12-month period.

The three firms have been named for their stake in the Farsi offshore block in Iran.

US GAO had included only ONGC and OIL in its previous report last year and kept IOC out because of "insufficient information available".

But in the report this year, it said: "The firm's (IOC's) 2013-14 annual report stated that the firm has a 40 per cent participating share in the Farsi Block Project."

It cites ONGC's annual report mentioning 40% interest in Farsi block as well as OIL's annual report stating 20 per cent stake in the block for being included in the report.

All the three firms gave similar response to US GAO saying the "exploration contract (for Farsi block) expired in 2009" and that they had "not carried out any activity after 2007 in the Farsi Block".

ONGC holds the 40% stake in Farsi through its overseas investment arm, ONGC Videsh Ltd.

After finding its name in on the list of entities engaged with Iran in three consecutive reports between 2010 and 2012, OVL stopped mentioning the Farsi stake in its annual report, resulting in its name being withdrawn in 2014.

Besides OVL, US GAO had also withdrawn Petronet LNG Ltd as well as Hinduja Group firm Ashok Leyland Project Services from the list saying "there were no open-source reports of the firms conducting commercial activity in Iran".

According to GAO, the US has not imposed sanctions on any firm for their Iran energy ties since 1998.

The US and its allies have pursued the sanctions route to isolate Iran over its alleged nuclear programme.

OVL, IOC and OIL explored for oil and gas in Iran's Farsi block and proposed investing $5.5 billion to produce gas from the 21.68 trillion cubic foot discovery they made in the offshore area located near the Saudi Arabian border.

They, however, haven't invested in the development due to differences over the contract with the Iranian government.