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Oil PSUs to seek legal opinion on impact of sanctions on Iran

world Updated: Jul 22, 2010 13:44 IST

The Indian government has asked its public sector oil firms to seek legal opinion on the impact of the latest round of US sanctions on Iran on their investment in the Persian Gulf nation, Oil Secretary S Sundareshan said in Dalat.

The Comprehensive Iran Sanctions, Accountability and Divestment Act of 2010 provides for sanctions against persons, including foreign firms, who invest more than $20 million in Iran's energy sector in any 12-month period.

"These are listed companies pursing opportunities in Iran. There is a need to access the potential impact of sanctions (on these investments)," Sundareshan said. "The companies have been asked to seek legal opinion."

The new US law targets companies investing, assisting or transferring technology to Iranian oil and gas companies.

The US administration had in May named Oil and Natural Gas Corporation, ONGC Videsh Ltd, Oil India Ltd, IndianOil, Hinduja Group and Petronet LNG among the 41 firms worldwide having energy ties with Iran, an act for which it may impose sanctions on them.

OVL, IOC and OIL explored for oil and gas in Farsi block and have proposed investing $5.5 billion in producing gas from the 21.68 Trillion cubic feet discovery they made in the offshore block located near the Saudi Arabian border.

Besides, ONGC, OVL, Petronet and Hinduja Group last year signed agreements with Iran to develop one of the 28 phases of the giant South Pars gas field and convert the fuel into LNG for exports at an investment of over $10 billion.

Besides, state gas utility GAIL India is spearheading talks on Iran-Pakistan-India gas pipeline project.

The US administration has not imposed sanctions on any firm for their Iran energy ties since 1998, also names Hinduja for ties with Iran but lists it as a UK firm.

Foreign Secretary Nirupama Rao this month had stated that India was "justifiably concerned that the extra-territorial nature of certain unilateral sanctions recently imposed by individual countries, with their restrictions on investment by third countries in Iran's energy sector, can have a direct and adverse impact on Indian companies and more importantly, on our energy security and our attempts to meet the development needs of our people."

"The Indian government does not invest in Iran. It is the publicly listed companies which are investing or are proposing to invest. Naturally, we want to assess if there will be any impact (of US sanctions) on such investment," Sundareshan said adding IOC, ONGC, OVL and GAIL will be seeking separate legal opinions.