Iran Sanctions: Firms Reported to Have Commercial Activity in the Iranian Energy Sector and U.S. Government Contracts
Abstract
I am pleased to be here today to discuss our work regarding foreign firms with commercial interests in Iran's energy sector. In March 2010, we issued a report identifying 41 foreign firms that have commercial activity in Iran's energy sector. The report released today identifies which of the 41 foreign firms also have U.S. government contracts.1 Iran's energy sector is vital to its economy and government. In recent years, oil export revenues have accounted for 24 percent of Iran's gross domestic product and between 50 and 76 percent of the Iranian governments revenues. However, Iran has not reached peak crude oil production levels since 1978, does not produce sufficient natural gas for domestic use, and lacks the refining capacity to meet domestic demand for gasoline. Accordingly, Iran is seeking the participation of foreign firms in providing financing and technical assistance in numerous energy projects. IHS Global Insight reports that Iran's priorities for the next 5 years are to (1) raise oil production and exports as much as possible, (2) increase natural gas production for domestic use, and (3) expand refining capacity. In November 2008, the Deputy Minister of the National Iranian Oil Company stated that Iran would need about $145 billion in new investment over the next 10 years to build a thriving energy sector. U.S. law restricts U.S. firms from investing in Iran's energy sector through sanctions to discourage Iran from supporting terrorism and developing nuclear weapons.2 In addition, the Iran Sanctions Act (ISA) provides for sanctions against persons, including foreign firms, who invest more than $20 million in Iran's energy sector in any 12-month period.3 The act allows the President, who delegated authority under the act to the Secretary of State, to ban such persons from U.S. government procurement, including contracts for goods or services.4
Document Details
- Document Type
- Technical Report
- Publication Date
- May 12, 2010
- Accession Number
- AD1178922
Entities
People
- Colleen Candrl
- Grace Lui
- Joanna Berry
- Jon Fremont
- Joseph A. Christoff
- Julia Kennon
- Lauren Membreno
- Pierre Toureille
- Tet Miyabara
Organizations
- United States Government Accountability Office