US moves ONGC Videsh out of list of firms with ties to Iran

The US administration has moved ONGC Videsh out of a list of companies known to have energy ties with Iran, but retained parent ONGC on the list, an act for which it can be sanctioned by Washington.

The US Government Accountability Office, in a recently released report, moved ONGC Videsh Ltd, the overseas arm of state explorer Oil and Natural Gas Corporation, and three others, including Petronet LNG Ltd, out of the list.

This follows detailed explanations by OVL and Petronet about their dealings, or rather non-dealings, with Iran.

"Since our last report in December 2012, we have moved four firms -- INA (of Croatia), ONGC Videsh Ltd, Petronet LNG, and Sasol -- to the ‘withdrawn’ category," the GAO report said.

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

GAO listed four of the 43 firms identified in 2010 as having ‘active’ energy ties with Iran.

These included ONGC and Oil India Ltd.

The other firms were China National Petroleum Corp and China Oilfield Services Ltd.

Indian Oil Corporationhas been clubbed with China National Offshore Oil Corp, Sinopec of China and Venezuela's Petroleos de Venezuela SA in a category of eight firms about which ‘insufficient information’

was available.

Previously, IOC, along with OVL, ONGC, OIL and Petronet, were listed as firms that had active ties with Iran.

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.

But OVL, the operator of the project, never invested a penny and put field development on the back-burner.

GAO said it had moved Hinduja Group firm Ashok Leyland Project Services out of the list of firms with ‘active’ energy ties with Iran to the ‘withdrawn’ category in 2011.

Petronet and Hinduja Group had signed agreements with Iran in 2009 to develop one of the 28 phases of the giant South Pars gas field and convert the fuel into LNG for export at an investment of over $10 billion.

The project never took off.

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.